U.S., Global Indexes Rise on Europe Hopes; Microsoft Net Rises 6%

Arthi Gupta
21 Oct, 2011
New York City

The U.S. stocks futures rose on hopes that European leaders weekend summit will provide a clear direction. Duke Realty agreed to sell suburban offices to Blackstone for $1.08 billion. IBM completed acquisition of Algorithmics for $380.2 million. Microsoft revenue rose 7%.

[R]8:45 AM New York – The U.S. stocks futures rose on hopes that European leaders weekend summit will provide a clear direction. Duke Realty agreed to sell suburban offices to Blackstone for $1.08 billion. IBM completed acquisition of Algorithmics for $380.2 million. Microsoft revenue rose 7%.[/R]

U.S. stocks futures and global indexes edged higher on optimism that European leaders will agree on a plan to release $1.3 billion of funds and recapitalize banks.

France and Germany are still at odds in how to leverage the European Financial Stability Fund and called for a second meeting on Wednesday.

Investors are increasingly worried that the EU plan will fall short of market expectations and banks will be asked to take larger losses in Greek bonds. Separately, ratings agencies are prepared to lower European sovereign debts if the region slips into a recession.

Greek lawmakers passed austerity measures in a final vote while demonstrators battled outside the parliament. The bill was passed by a 153-to-144 vote in the parliament.

U.S. Economic Indicators Index Up

The Conference Board report released on Thursday showed that the U.S. leading economic indicators edged higher 0.2% in September after rising 0.3% in August.

The Conference Board also said its coincident economic index climbed 0.1% in September after dropping 0.1% in August.

Duke Realty Sells Suburban Offices

Duke Realty Corporation agreed to sell a 10.1 million square foot portfolio of suburban office properties located in seven markets throughout the Midwest and Southern regions to an affiliate of Blackstone Real Estate Partners VII for $1.08 billion.

The affiliate agreed to purchase the 82 building portfolio, including suburban office properties in Atlanta, Chicago, Columbus, Dallas, Minneapolis, Orlando and Tampa.

IBM Completes Algorithmics Acquisition

IBM said it has closed the acquisition of Algorithmics for a purchase price of $380.2 million. The acquisition expands IBM’s business analytics capabilities in the area of financial risk.

Earnings Review

A.O. Smith Corporation ((AOS)), the manufacturer and marketer of residential and commercial water heaters and boilers stated third quarter net sales increased 9.2% to $412 million from $377.4 million in the previous year. Net earnings in the quarter soared 470% to $182.3 million or $3.91 per diluted share compared to net earnings of $32 million or 69 cents per share reported a year ago.

Chipotle Mexican Grill, Inc. ((CMG)), the restaurant chain said third quarter revenues soared 24.1% to $591.9 million, from $476.9 million the prior-year period. Net income in the quarter increased 25.3% to $60.4 million or $1.90 per diluted share compared to net income of $48.2 million or $1.52 per share in the third quarter of 2010.

Microsoft Corporation ((MSFT)), the software company said first quarter revenue rose 7.3% to $17.37 billion from $16.19 billion in the same quarter last year. Net income in the quarter gained 6.1% to $5.74 billion or 68 cents per diluted share compared to net income of $5.41 billion or 62 cents per share for the year-ago quarter.

Schlumberger Limited ((SLB)), the oilfield services provider reported third quarter revenue surged 49% to $10.23 billion from $6.85 billion in the comparable period. Net income in the quarter fell 25% to $1.30 billion or 96 cents per diluted share compared to net income of $1.73 billion or $1.38 per share in the prior-year period.