U.S. Stocks Search Bottom; RiM Plunges 23%

Arthi Gupta
16 Sep, 2011
New York City

U.S. indexes futures struggled and tech stocks were lower after Research in Motion Limited net plunged 59%. GE expanded presence in Russian healthcare and energy markets. General Dynamics won $1.8 billion contract for construction of two ships in the Zumwalt-class program.

[R]8:45 AM New York – U.S. indexes futures struggled and tech stocks were lower after Research in Motion Limited net plunged 59%. GE expanded presence in Russian healthcare and energy markets. General Dynamics won $1.8 billion contract for construction of two ships in the Zumwalt-class program.[/R]

U.S. indexes struggled in the pre-market trading and may close lower ending a 4-day rally.

European and Asian indexes gained on the easing of euro area debt concerns but banks were in focus.

The coordinated central banks action to provide dollar liquidity eased the tension in the short term debt market and reassured financial markets that the central banks stand ready to pump new money and avoid a scenario all too familiar in 2008.

A meeting of European finance officials is scheduled in Wroclaw, Poland to discuss the sovereign crisis. U.S. Treasury Secretary Timothy F. Geithner is expected to urge EU finance ministers to step up their crisis-fighting strategy.

Denmark's center-left Social Democrat bloc leader Helle Thorning-Schmidt is expected to be the country's first woman Prime Minister.

Moody's placed UBS AG’s C/A3 standalone financial strength rating and its Aa3 long-term debt and deposit ratings on review for possible downgrade after a trader in London lost $2 billion in unauthorized trades.

Volkswagen AG, the German automaker said it would invest around €62.4 billion in its Automotive Division in the coming five years as a part of its investment planning for 2012 to 2016.

Reserve Bank of India today raised its key interest rates by 25 basis points to 8.25% and also lifted the repo rates by the same magnitude to 7.25%. This marks the twelfth rate increase since March 2010.

General Electric Expands in Russia

General Electric Co. said it expanded its presence in the Russian healthcare and energy markets by finalizing agreements to set up two new joint ventures in Russia which could drive $10 billion to $15 billion in sales.

The JVs will accelerate development of the Russian electrical generation and health care sectors.

General Dynamics Secures Contract

General Dynamics Bath Iron Works, a subsidiary of General Dynamics won a $1.8 billion contract for the construction of DDG 1001 and DDG 1002, the next two ships in the Zumwalt-class program.

DDG 1001 is scheduled to be delivered in December 2015 and DDG 1002 is scheduled to be delivered in February 2018.

Earnings Review

AAR Corp. ((AIR)), the aircraft-leasing-and-maintenance company reported first quarter revenues grew 19% to $479.3 million from $404.4 million in the year-ago quarter. Net income in the quarter rose 21.2% to $16.6 million or 41 cents per diluted share compared to net income of $13.7 million or 35 cents per share in the year-ago period.

Diamond Foods, Inc. ((DMND)), the packaged food company said fourth quarter sales rose 32% to $232.8 million from $176.6 million last year. Net earnings in the quarter increased 27% to $8.5 million or 37 cents per diluted share compared to net earnings of $6.7 million or 30 cents per share last year.

Nucor Corporation ((NUE)), the steel maker estimated third quarter earnings in a range of $0.45 to $0.55 a share.

Research In Motion Ltd. ((RIMM)), the BlackBerry maker said second quarter revenue fell 10% to $4.2 billion from $4.6 billion in the same quarter last year. Net income in the quarter plunged 59% to $329 million or 63 cents per diluted share compared to net income of $797 million or $1.46 per share for the year-ago quarter.