U.S. Mortgage Applications Up 4.1%; Dell Net Soars 63%

Arthi Gupta
17 Aug, 2011
New York City

U.S. indexes gained after mortgage applications rose 4.1% and producer price index climbed 0.2% in July. General Dynamics agreed to acquire Vangent for approximately $960 million. Abercrombie & Fitch net surged 64% in the quarter.

[R]9:35 AM New York – U.S. indexes gained after mortgage applications rose 4.1% and producer price index climbed 0.2% in July. General Dynamics agreed to acquire Vangent for approximately $960 million. Abercrombie & Fitch net surged 64% in the quarter.[/R]

The U.S. stocks traded higher after the release of wholesale prices inflation rose at a faster pace than accepted and stronger earnings from Staples and Dell.

European indexes traded sideways after French President Nicolas Sarkozy and German Chancellor Angela Merkel’s meeting yesterday in Paris to discuss the region’s debt crisis did nothing to lift market sentiment.

Both leaders called for economic coordination and urged all member nations to adopt balanced budget rules. However, they rejected the issuance of euro bonds as a solution to the ongoing debt crisis.

The leaders also felt there was no need of expanding the euro-zone rescue fund at this juncture from its present €440 billion but considered proposals for a new financial-transaction tax.

Greece reached an agreement with Finland on collateral for securing Finland''s share in Greece’s bailout, reports said citing a statement by the Finnish Finance Ministry.

The Swiss National Bank said that it would expand the supply of liquidity to the Swiss franc money market as part of its measures against the ''massively overvalued'' Swiss franc.

Euro-zone annual inflation slowed to 2.5% in July from 2.7% in June but continued to stay above the 2% ceiling.

Asian markets traded mixed.

U.S. Mortgage Applications Rise

U.S. mortgage applications rose last week, boosted by strong refinancing demand, according to industry data published today.

The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, rose 4.1% in the week ended August 12.

Refinancing gained 8% to its highest level in nine months, but loan requests for home purchases slumped 9.1%.

Fixed 30-year mortgage rates averaged 4.32%, down from 4.37% the week before.

U.S. Producer Prices Up

U.S. producer price index rose 0.2% in July following a 0.4% decrease in June, according to data released by the U.S. Labor Department.

The core producer price index, which excludes the food and energy sectors, rose 0.4% in July after climbing 0.3% in June.

General Dynamics to Acquire Vangent

General Dynamics agreed to acquire Vangent Holding Corp., the parent company of Vangent, Inc., in a cash transaction valued at approximately $960 million.

Vangent will become part of General Dynamics Information Technology.

Sony Slashes PlayStation 3 Price

Sony Corp. slashed the prices of its PlayStation 3 videogame console in North America, Europe, and Japan as part of the company''s efforts to boost demand and sales.

Chico''s FAS to Buy Boston Proper

Chico''s FAS, Inc. announced an agreement to acquire Boston Proper Inc., a Boca Raton, Florida based privately held direct-to-consumer retailer of distinctive women''s apparel and accessories for $205 million.

Earnings Review

Abercrombie & Fitch Co. ((ANF)), the specialty retailer reported second quarter total net sales grew 23% to $916.76 million from $745.80 million in the same quarter last year on comparable store sales rise of 9%.

Net income in the quarter soared 64% to $32.03 million or 35 cents per diluted share compared to net income of $19.48 million or 22 cents per share in the prior-year quarter.

Analog Devices, Inc. ((ADI)), the semiconductor company reported third quarter sales rose 5% to $758 million, from $720 million in the prior year. Net earnings in the quarter rose 10.3% to $220.0 million or 71 cents per diluted share compared to net earnings of $199.5 million or 65 cents per share in the prior year.

Dell Inc. ((DELL)), the PC maker said second quarter revenue rose 1% to $15.7 billion from $15.5 billion in the same quarter last year. Net income in the quarter surged 63% to $890 million or 48 cents per diluted share compared to net income of $545 million or 28 cents per share for the year-ago quarter.

Staples, Inc. ((SPLS)), the office products company reported second quarter sales improved 5.2% to $5.82 billion from $5.53 billion in the year-ago period. Net income in the quarter soared 36% to $176.44 million or 25 cents per diluted share compared to net income of $129.76 million or 18 cents per share in the previous year.