U.S. Housing Starts Fall 1.5%; Wal-Mart Net Up 5.7%

Arthi Gupta
16 Aug, 2011
New York City

U.S. indexes traded sideways after housing starts fell and import prices recovered in July. The World Bank warned that depleting food stocks and high inflation are cause for concern. Cargill planned to acquire Provimi for

[R]9:45 AM New York – U.S. indexes traded sideways after housing starts fell and import prices recovered in July. The World Bank warned that depleting food stocks and high inflation are cause for concern. Cargill planned to acquire Provimi for €1.5 billion. Home Depot and Wal-Mart quarterly net rose.[/R]

U.S. indexes fluctuated after housing starts and building permits fell but import prices rose 0.3% in July.

European indexes edged lower after euro-zone economic growth was not sustaining in the second quarter.

Euro-zone and German economic growth slowed more than estimated in the second quarter on the deteriorating sovereign debt crisis in the region.

Euro area gross domestic product rose 0.2% in the second quarter compared to the 0.8% expansion in the first three months of the year, data from the Eurostat showed today.

German GDP grew 0.1% on a seasonally adjusted basis in the second quarter following a downwardly revised 1.3% expansion in the first quarter, the Federal Statistics Office said.

French President Nicholas Sarkozy and German Chancellor Angela Merkel are scheduled to meet in Paris later today to discuss measures to tackle the region''s sovereign debt crisis.

Asian markets declined on global economic concerns.

The World Bank Group''s Food Price Watch released on Tuesday showed that prices overall remained 33% higher than a year ago with commodities such as corn, sugar, wheat and soybean oil contributing to the increase.

Crude oil prices are 45% higher at the end of July from a year ago.

U.S. Housing Starts, Permits Drop

The U.S. Commerce Department released a report showing housing starts and building permits declined in the month of July.

The report showed that housing starts fell 1.5% to an annual rate of 604,000 in July from the downwardly revised June estimate of 613,000.

Building permits, an indicator of future housing demand, fell 3.2% to an annual rate of 597,000 in July from the revised June rate of 617,000.

Housing completion rose 11.8% from June or rose 9.5% from a year-ago month to 636,000.

U.S. Import Prices Recover

U.S. import prices rose 0.3% in July following a revised 0.6% decrease in June, according to a report released by the U.S. Labor Department.

Excluding a 0.4% rise in prices for fuel imports, import prices rose 0.2% in July compared to a 0.1% drop in June.

The Labor Department said export prices dropped 0.4% in July after edging higher 0.1% in June.

Cargill Plans to Acquire Provimi

Cargill Inc., the producer and marketer of food, agricultural, financial and industrial products and services planned to acquire Provimi, the global animal nutrition company, for an enterprise value of €1.5 billion from the private equity firm Permira funds.

KAR Buys OPENLANE

KAR Auction Services, Inc. said that its subsidiary, ADESA, Inc., agreed to acquire OPENLANE, Inc., an Internet-based business-to-business automotive remarketing company for $210 million in cash, plus an increase for excess cash on OPENLANE’s balance sheet at closing.

In 2011, KAR expects that OPENLANE will generate approximately $100 million in revenue and sell over 300,000 vehicles to automotive dealers through its online auction services platform.

Earnings Review

Agilent Technologies Inc. ((A)), the scientific instruments maker said third quarter revenues rose 22% to $1.69 billion from $1.38 billion in the same quarter last year. Net income in the quarter surged 61% to $330 million or 92 cents per diluted share compared to net income of $205 million or 58 cents per share for the year-ago quarter.

The Home Depot, Inc. ((HD)), the home improvement specialty retailer reported second quarter net sales increased 4.2% to $20.23 billion from $19.41 billion in the previous year. Comparable-store sales, or sales from stores open for at least a year, increased 4.3% for the quarter, with a 3.5% rise in comp sales for U.S. stores.

Net earnings increased 14.3% to $1.36 billion or 86 cents per diluted compared with net earnings of $1.19 billion or 72 cents per share, in the year-ago period.

Urban Outfitters, Inc. ((URBN)), the apparel retailer reported second quarter net sales rose 10% to $609 million from $552 million in the corresponding quarter last year. Net income in the quarter fell 20.9% to $56.7 million or 35 cents per diluted share compared to net income of $71.7 million or 42 cents per share last year.

Wal-Mart Stores, Inc. ((WMT)), the retail stores operator stated second-quarter net sales increased 5.5% to $108.6 billion, from $103.0 billion in last year''s second quarter. Net income in the quarter rose 5.7% to $3.80 billion or $1.09 per diluted share compared to net income of $3.60 billion or 97 cents per share last year.