World Indexes Stable as Greece Concerns Ease; GE, Microsoft Net Rise

Arthi Gupta
22 Jul, 2011
New York City

U.S. indexes gained after euro-zone leaders agreed on new bailout package for Greece with private sector contributions of

[R]9:45 AM New York – U.S. indexes gained after euro-zone leaders agreed on new bailout package for Greece with private sector contributions of €50 billion. U.S. leading indicators index climbed in June. Microsoft quarterly profit rose 30% and GE net gained 22%.[/R]

World indexes gained after euro-zone leaders on Thursday agreed on a new aid package for Greece that will offer new loans at cheaper interest rates and at extended maturities.

The euro-zone countries and the International Monetary Fund will lend an additional €109 billion with the private financial sector making its own contribution of €50 billion. The package comes in addition to the €110 billion Greece received as part of its first bailout in 2010.

The future loans will be disbursed from the €440 billion rescue fund to Greece from the current 7.5 years to a minimum of 15 years and up to 30 years with a grace period of 10 years.

The U.S. Senate on Thursday began debating a bill that would cut government spending by $111 billion in fiscal 2012 and cap spending at 22.5% of GDP next year.

The House voted 234 to 190 to advance the measure, which would also increase the federal debt ceiling by $2.4 trillion.

The Senate is expected to reject the bill by Saturday and pass its own measure that will see spending cut $3.4 trillion and raise debt limit as well.

Separately, Standard & Poor''s warned that the triple-A U.S. credit rating will be downgraded in the next three months if the nation''s debt ceiling is not raised.

U.S. Leading Index Climbs

Leading economic indicators in the U.S. saw a modest increase in the month of June, according to a report released by the Conference Board on Thursday.

The Conference Board said its leading economic index rose 0.3% in June following a 0.8% increase in May. The index rose for the second consecutive month after slipping 0.3% in April.

Separately, the Philly Fed said its diffusion index of current activity rose to a positive 3.2 in July from a negative 7.7 in June.

Earnings Review

Advanced Micro Devices, Inc. ((AMD)), the chip maker said second quarter revenue declined 5% to $1.57 billion from $1.65 billion in the same quarter last year. Net income generated in the quarter was $61 million or 8 cents per diluted compared to a net loss of $43 million or 6 cents per diluted share in the prior-year quarter.

General Electric Company ((GE)), reported second quarter revenues decreased 4% to $35.63 billion from prior year''s $36.93 billion. Net earnings in the quarter climbed 22% to $3.69 billion or 35 cents per diluted share compared to net earnings of $3.03 billion or 28 cents per diluted share in the year earlier quarter.

Microsoft Corporation ((MSFT)), the software company said fourth quarter revenue rose 8% to $17.37 billion from $16.04 billion in the same quarter last year. Net income in the quarter surged 30% to $5.9 billion or 69 cents per diluted share compared to net income of $4.5 billion or 51 cents per diluted share for the year-ago quarter.

Schlumberger Limited ((SLB)), the oilfield services provider reported second quarter revenues grew 62% to $9.62 billion from $5.94 billion reported in the same quarter last year. Net income in the quarter soared 64% to $1.34 billion or 98 cents per diluted share compared to net income of $818 million or 68 cents per diluted share in the previous year.

The Chubb Corporation ((CB)), the property and casualty insurer reported second quarter net income dropped 19% to $419 million or $1.42 per diluted share compared to net income of $518 million or $1.59 per diluted share in the year-ago period.

Net written premiums for the quarter increased 6% to $3.1 billion, with more growth coming from outside the U.S.