U.S. Weekly Jobless Claims Rise; Alexion to Acquire Enobia Pharma

Arthi Gupta
29 Dec, 2011
New York City

The U.S. indexes traded higher after weekly jobless claims rose 15,000 to 381,000. Chesapeake Midstream agreed to acquire Appalachia Midstream for $865 million. Mosaic declined after the phosphate maker said it will cut output by 250,000 tons.

[R]10:10 AM New York – The U.S. indexes traded higher after weekly jobless claims rose 15,000 to 381,000. Chesapeake Midstream agreed to acquire Appalachia Midstream for $865 million. Mosaic declined after the phosphate maker said it will cut output by 250,000 tons.[/R]

U.S. indexes traded sideways after weekly jobless claims rose 15,000 to 381,000 and Italy completed the sale of bond auction at a lower yield. The indexes gained but metal and oil prices diverged.

The European indexes gained after Italy sold €7.02 billion of long term debt at an auction today, less than its maximum target of €9 billion in the final sale of the year.

However the stress in the bond market was evident as the yield decline was less that expected to 7% from the peak of 7.56% in the last auction in November. The long term outlook for Italy is uncertain and political parties are still struggling to develop economic plans that will accommodate the higher yields and stimulate long term growth.

The Treasury in Rome sold €2.5 billion of 10-year bonds at an average yield of 6.98%, down from 7.56% in the previous auction on November 29. The bid-to-cover ratio was 1.34 compared with the bid-to-cover ratio of 1.36 last month.

The agency sold €2.5 billion in 3-year bonds at an interest rate of 5.62% compared to 7.89% at the previous sale on November 29. The country also sold €2 billion in bonds due for repayment in 2021 and a floating-rate security due 2018.

Italian 10-year yield climbed 12 basis points to 7.12% after the auction and Italy plans to raise at least €450 billion in debt in 2012.

The German economy is likely to expand 0.4% next year, Beatrice Weder di Mauro, member of the government''s council of economic advisers reportedly told newspaper Bild on Thursday.

Asian stocks edged lower amid thin holiday trading volume.

U.S. Weekly Jobless Claims Rise

First-time claims for U.S. unemployment benefits rebounded by more than estimated in the week ended December 24, according to a report released by the U.S. Labor Department today.

The report showed that initial jobless claims rose to 381,000 from the previous week''s revised figure of 366,000.

Alexion to Acquire Enobia Pharma

Alexion Pharmaceuticals, Inc. and Canada-based Enobia Pharma Corp. signed an agreement under which Alexion will acquire 100% of the capital stock of Enobia in an all-cash transaction.

Under the terms of the agreement, Alexion agreed to pay $610 million in cash upon consummation of the transaction, and up to $470 million in cash to be paid upon achievement of various regulatory and sales milestones.

Chesapeake Midstream to Buy Gas Gathering Assets

Chesapeake Midstream Partners, L.P. agreed to acquire Appalachia Midstream Services, L.L.C., the wholly owned subsidiary of Chesapeake Midstream Development, L.P. that holds its Marcellus Shale midstream assets, for total consideration of $865 million.

Through acquiring AMS, Chesapeake Midstream said that it will own approximately 47% of an integrated system of assets that consist of approximately 200 miles of gathering pipeline in the Marcellus Shale, including the liquids-rich Marcellus South region.

Earnings Review

Leggett & Platt, Inc. ((LEG)), the diversified manufacturer said it expected to record a largely non-cash pre-tax restructuring charge of about $36 billion in its fourth quarter. Excluding this charge, the company said it expects full year earnings between $1.15 and $1.20 per share, while reported earnings per share is expected to be 99 cents to $1.04 per share.