U.S. Indexes Gain; Heinz, Medtronic Net Fall

Arthi Gupta
23 Aug, 2011
New York City

U.S. indexes gained after Chinese manufacturing activity rose. European markets gained and Asian markets soared. Boeing secured

[R]9:40 AM New York – U.S. indexes gained after Chinese manufacturing activity rose. European markets gained and Asian markets soared. Boeing secured £1 billion contract from the UK Ministry of Defence for 14 new Chinooks. Omnicare proposed to acquire PharMerica for $15 per share in cash.[/R]

U.S. indexes gained fraction and traded in narrow range and the dollar traded higher against the euro. The European and Asian markets gained.

European indexes edged higher tracking gains in Asia and a rise in commodities markets and the ECB lowered its purchase of sovereign bonds of peripheral nations. The indexes were higher after Spain completed an auction of bonds at a lower yield.

The French and German finance ministers are scheduled to meet in Paris today for the formulation of a financial transaction tax and harmonization of corporate taxes between the two countries.

The Markit/HSBC survey showed that the Chinese purchasing managers'' index rose to 49.8 in August from 49.3 in July.

Private sector activity in the euro zone region remained stable, according to the results of a survey by Markit Economics. Flash estimates showed that the composite output index remained unchanged at 51.1.

German economic sentiment worsened in August with the corresponding indicator declining 22.5 points to -37.6 driven by uncertain macroeconomic conditions.

UBS planned to eliminate around 3,500 jobs to reduce annual costs by Sfr2 billion by the end of 2013.

Libyan rebels led by the NATO aggression tightened their grip on Tripoli with the capture of Muammar Gaddafi''s three sons and fighting was still raging around Gaddafi''s compound in Tripoli but the whereabouts of the Libyan leader were still unknown.

AGI World and Shorewood to Merge

International Paper and Atlas Holdings agreed to combine their consumer packaging solutions businesses to create an innovative specialty packaging business with operations in North America, Europe, Asia, Australia and Latin America.

International Paper''s Shorewood Packaging will merge with Atlas Holdings'' AGI World and the combined entity will be named AGI-Shorewood. The deal is expected to close before the end of 2011.

Boeing Receives UK Contract

Boeing received a $1.64 billion or £1 billion contract from the UK Ministry of Defence to provide 14 new CH-47 Chinook helicopters and associated support for the first five years to the Royal Air Force.

Omnicare Proposes to Buy PharMerica

Omnicare, Inc., the pharmaceutical services company proposed to acquire PharMerica Corp. for $15 per share in cash. The transaction is valued at about $716 million, including PharMerica''s net debt.

The offer represents a 37.2% premium over PharMerica''s closing stock price of $10.93 on August 22.

Earnings Review

H.J. Heinz Company ((HNZ)), the food company reported first quarter sales improved 15% to $2.85 billion compared with $2.48 billion in the previous year. Net income in the quarter fell 6% to $226.11 million or 70 cents per diluted share compared with net income of $240.43 million or 75 cents per share last year.

Medtronic, Inc. ((MDT)), the medical technology company said first quarter net sales increased 7.4% to $4.05 billion from $3.77 billion in the comparable period a year ago. Net earnings in the quarter decreased 1.1% to $821 million from $830 million last year. Earnings per diluted share rose to 77 cents from 76 cents per share a year earlier.

Raven Industries, Inc. ((RAVN)), the industrial manufacturer reported second quarter sales increased 23% to $90.3 million from $73.2 million a year ago. Net income in the quarter surged 49% to $12.5 million or 68 cents per diluted share compared to net income of $8.4 million or 46 cents per share last year.

Williams-Sonoma, Inc. ((WSM)), the home products retailer reported second quarter net revenues increased 5.1% to $814.75 million from $775.55 million in the previous year. Net earnings in the quarter rose 27.8%to $39.31 million or 37 cents per diluted share compared to net earnings of $30.76 million or 28 cents per share a year ago.