U.S. Growth Outlook Lowered; Dollar General Net Rises

Arthi Gupta
30 Aug, 2011
New York City

U.S. indexes traded lower ahead of the consumer confidence report and the minutes of the FOMC meeting held in August. Bank of America agrees to sell its partial stake in China Construction Bank.

[R]10:00 AM New York – U.S. indexes traded lower ahead of the consumer confidence report and the minutes of the FOMC meeting held in August. Bank of America agrees to sell its partial stake in China Construction Bank.[/R]

U.S. indexes traded lower ahead of the consumer confidence report and the minutes of the FOMC meeting held in August.

The International Monetary Fund lowered the growth forecast for the U.S. and euro-zone, reports quoted Italy''s ANSA news agency as saying on Monday.

The multi-lateral agency lowered the U.S. gross domestic product to 1.6 from 2.5% forecast in June and 2012 outlook was cut to 2% from 2.7%.

European indexes fell after euro-zone economic confidence declined sharply in August driven by a broad-based deterioration in sentiment across the sectors, a monthly survey from the European Commission showed.

The economic confidence index fell to 98.3 in August, its lowest level since May 2010, from 103 in July.

Asian markets traded mixed.

BofA Agrees to Sell Stake in China Construction Bank

Bank of America Corporation agreed to sell approximately 13.1 billion common shares of China Construction Bank Corporation in a private transaction with a group of investors. The sale is expected to generate approximately $8.3 billion in cash proceeds and an after-tax gain on sale of approximately $3.3 billion.

After the closing, Bank of America will hold approximately 5$ of CCB.

Macarthur Accepts Sweetened Offer

Macarthur Coal Ltd., the Australian coal producer accepted a sweetened A$16 per share all-cash acquisition offer from PEAMCoal Pty Ltd. in a deal valued at A$4.8 billion.

PEAMCoal is a newly formed company that is 60% owned by U.S. coal miner Peabody Energy Corp. and 40% by ArcelorMittal SA.

PEAMCoal sweetened its offer by A$0.50 per share over its initial offer of $15.50 per share and it represents a 44% premium to the closing price of Macarthur Coal stock on the Australian Securities Exchange of A$11.08 on July 11, the last trading day prior to the initial offer.

BP Inks Deal With Reliance Industries

BP plc completed a $7.2 billion deal to acquire a 30% stake in 21 oil and gas blocks operated by Reliance Industries Limited in India, including the producing eastern offshore Krishna Godavari basin or KG D6 block, the two companies said today.

Earnings Review

The Bank of Nova Scotia ((BNS, BNS.TO)), the diversified financial institution reported third quarter total revenue grew 14% to C$4.30 billion from C$3.78 billion in the prior year. Net income in the quarter increased 18.8% to C$1.20 billion or C$1.11 per diluted share compared to net income of C$1.01 billion or C$0.98 per share in the same period a year ago.

Barnes & Noble, Inc. ((BKS)), the bookseller reported first quarter total sales gained 2% to $1.42 billion compared with $1.395 billion in the prior year. Net loss in the quarter narrowed 9.5% to $56.61 million or 99 cents per diluted share compared to net loss of $62.52 million or $1.12 per share last year.

Dollar General Corp. ((DG)), the discount retailer reported second quarter net sales climbed 11.2% to $3.58 billion from $3.21 billion last year. Net income for the quarter increased 3.4% to $146.04 million or 42 cents per diluted share compared with net income of $141.20 million or 41 cents per share last year.

DSW Inc. ((DSW)), the footwear specialty retailer reported second quarter net sales grew 14.7% to $476.31 million from $415.12 million in the same quarter a year earlier. Comparable sales increased 12.3% this quarter compared to a 12% rise in the prior-year quarter.

Net income in the quarter rose 43.7% to $33.7 million or 74 cents per diluted share compared with net income of $23.5 million or 52 cents per share in the same quarter a year earlier.