U.S., Global Indexes Rise; HP Net Slumps 91%

Arthi Gupta
22 Nov, 2011
New York City

U.S. stock futures and global indexes gained after ratings agencies left the U.S. debt rating unrevised. World Bank increased its 2011 growth forecast for China. Pfizer agreed to acquire Excaliard and Medtronic quarterly net surged 54%.

[R]8:35 AM New York – U.S. stock futures and global indexes gained after ratings agencies left the U.S. debt rating unrevised. World Bank increased its 2011 growth forecast for China. Pfizer agreed to acquire Excaliard and Medtronic quarterly net surged 54%.[/R]

U.S. stock futures and global indexes gained after ratings agencies left the U.S. debt rating unrevised after the debt panel failed to agree on $1.2 trillion in debt reduction.

But, Fitch Ratings said that it would conclude a review of U.S. sovereign credit ratings by the end of November and Moody’s and S&P said they are not downgrading the debt ratings at least for now.

U.S. Deficit Reduction Talks Fail

The Super Committee of 12-member panel of House and Senate members failed to agree on a plan to cut at least $1.2 trillion from the U.S. deficit over 10 years.

President Barack Obama expressed disappointment with the outcome, but vowed to veto any attempt to undo the automatic spending cuts.

""One way or another we will be trimming the deficit by a total of at least $2.2 trillion over the next decade,"" Obama said. ""That''s going to happen.""

The committee''s failure triggers automatic cuts to social programs and defense spending, though the reductions are not scheduled to go into effect until 2013.

Spanish Bond Auction

The Spanish Treasury sold €2.01 billion of three-month bills at an average yield of 5.11% compared with 2.292% in the previous auction held on October. The bid-to-cover ratio for the three-month notes was 2.85 compared with 3.07 times in October.

The Treasury also sold €970 million of six-month bills at an average yield of 5.227%, up from 3.302% in the previous auction last month. The bid-to- cover for the six-month debt was 4.92 compared with 2.59 in the last auction.

Bundesbank Lowers 2012 Growth Outlook

The Bundesbank on Monday slashed the 2012 economic growth outlook for Germany, citing weakening prospects for exports due to euro-zone''s debt crisis.

Germany’s central bank estimated the economy to grow between 0.5% and 1.0% next year, slower than the previous estimate of 1.8%.

The World Bank increased its 2011 growth forecast for China but expects growth to moderate from next year. The Washington-based agency said in its East Asia and Pacific Economic Update that China''s economy will grow 8.4% in 2012 and experience roughly similar rates of growth in the following years.

[U.S. Existing Home Sales Rise

Existing home sales in the U.S. unexpectedly rose in October, according to a report released by the National Association of Realtors on Monday.

NAR said existing home sales rose 1.4% to an annual rate of 4.97 million in October from a downwardly revised 4.90 million in September.

The report also showed that the median existing-home price was $162,500 in October, down 2% from $165,800 in September and down 4.7% from $170,600 in October of 2010.

Pfizer to Acquire Excaliard

Pfizer Inc. will acquire Excaliard Pharmaceuticals, Inc., a privately owned biopharmaceutical company focused on developing drugs for the treatment of skin fibrosis. The specific financial terms are confidential.

Earnings Review

Analog Devices, Inc. ((ADI)), the semiconductor company reported fourth quarter revenues dropped 7% to $716.1 million from $770.0 million in the year-ago quarter. Net income in the quarter fell 18.4% to $183.5 million or 60 cents per diluted share compared to net income of $225.0 million or 73 cents per share in the year-ago period.

Chico''s FAS, Inc. ((CHS)), the specialty retailer said third-quarter net sales rose 11.5% to $538.5 million from $483 million in the prior year. Consolidated comparable sales increased 3.7% for the quarter following a 5.5% increase for the same period last year.

Net income in the quarter fell 8% to $26.5 million or 16 cents per diluted share compared to $28.8 million or 16 cents per share last year.

Hewlett-Packard Company ((HPQ)), the technology company reported fourth quarter revenues declined 3% to $32.1 billion from $33.28 billion last year. Net income in the quarter plunged 91% to $239 million or 12 cents per diluted share compared to net income of $2.54 billion or $1.10 per share last year.

Medtronic, Inc. ((MDT)), the medical technology company stated second quarter net sales grew 5.9% to $4.13 billion from $3.9 billion a year ago. Net earnings in the quarter increased 54% to $871 million or 82 cents per diluted share compared to net earnings of $566 million or 52 cents per share last year.