S&P 500 Lower on Global Markets Sell-off; HP Net Rises 9%

Arthi Gupta
19 Aug, 2011
New York City

U.S. indexes decline for the third day in a row as global economic worries intensify. AIG reduced U.S. Treasury stake in its subsidiary by repaying $2 billion. Bank of America plans to cut 3,500 jobs this quarter. Norilsk Nickel offered to buy back 15% of its stake held by Rusal for $8.75 billion.

[R]10:00 AM New York – U.S. indexes decline for the third day in a row as global economic worries intensify. AIG reduced U.S. Treasury stake in its subsidiary by repaying $2 billion. Bank of America plans to cut 3,500 jobs this quarter. Norilsk Nickel offered to buy back 15% of its stake held by Rusal for $8.75 billion.[/R]

U.S. indexes declined more than 1% in the pre-market trading and extended losses for the third day in a row. The indexes are trading at ten-month low and may close down more than 3% in the week.

European indexes slumped more than 4% after investors focused on the weak U.S. economic data and questioned the health of the euro-zone banking system. The markets were weak at the opening after Asian markets plunged between 2.5% and 6% and on the elevated jobless claims and weak home sales and a regional manufacturing data in the U.S.

Greece''s economy is set to shrink more than 4.5% this year from the official projection of 3.8% to 3.9% this year, Finance Minister Evangelos Venizelos said in an interview with SKAI radio today.

AIG Reduces Treasury Stake

American International Group, Inc. reduced the remaining liquidation preference of preferred interests that the U.S. Department of the Treasury holds in AIA Aurora LLC to approximately $9.3 billion by applying the proceeds of approximately $2 billion from the sale of Nan Shan Life Insurance Company, Ltd.

Bank of America Plans Jobs Cut

Bank of America Corp. is expected to cut 3,500 jobs in the current quarter and also plans a broader restructuring that could eliminate at least 4,000 more positions before the end of the year.

Liberty Media Invests In Barnes & Noble

Barnes & Noble, Inc., the bookstore chain announced that Liberty Media Corp. made a strategic investment of an aggregate of $204 million in the company through the purchase of newly issued convertible preferred stock.

Norilsk Nickel Proposes Stake Buy Back

OJSC Norilsk Nickel Mining and Metallurgical Co., Russia''s largest mining and metals firm proposed to buy back 15% of its stake held by Russian aluminum firm UC Rusal for $8.75 billion.

Norilsk Nickel will pay $306 per share for 28.59 million of its ordinary shares held by UC Rusal''s unit UC Rusal Investment Management LLC.

Earnings Review

Ann INC. ((ANN)), the specialty retailer of women’s apparel, shoes and accessories reported second quarter total net sales climbed 15.4% to $558.2 million compared with $483.5 million in the second quarter of fiscal 2010. Total company comparable sales for the quarter increased 8.6% versus the second quarter of 2010.

Net income increased 33.3% to $24.8 million or 47 cents per diluted share compared to net income of $18.6 million or 31 cents per share last year.

Hewlett-Packard Company ((HPQ)), the information technology corporation said third quarter net revenue rose 1% to $31.19 billion from $30.73 billion in the same quarter last year. Net income in the quarter rose 9% to $1.9 billion or 93 cents per diluted share compared to net income of $1.8 billion or 75 cents per share for the year-ago quarter.

Intuit Inc. ((INTU)), the software company reported fourth quarter revenues rose 10% to $593 million from $537 in the year-ago quarter. Net loss in the quarter widened 19% to $57 million or 19 cents per diluted share compared to a net loss of $48 million or 15 cents per share in the year-ago quarter.

salesforce.com, inc. ((CRM)), the provider of enterprise cloud computing applications stated second quarter sales surged 38% to $546.0 million, from $397.4 million a year earlier. Net loss in the quarter was $4 million or 3 cents per diluted share compared with a profit of $14.7 million or 11 cents per share a year earlier.