U.S. Jobless Claims, Durable Orders Rise; Amgen in $1.2 B Deal with Micromet

Arthi Gupta
26 Jan, 2012
New York City

The U.S. indexes edged higher after weekly jobless claims and durable goods orders rose, new home sales declined and leading economic index improved. Amgen agreed to acquire Micromet for $1.16 billion.

[R]10:45 AM New York – The U.S. indexes edged higher after weekly jobless claims and durable goods orders rose, new home sales declined and leading economic index improved. Amgen agreed to acquire Micromet for $1.16 billion.[/R]

U.S. indexes gained after some upbeat economic data. Weekly jobless claims and durable goods orders rose more than estimated. However, new home sales fell but leading economic index advanced.

European markets traded higher more than 1.5% after Italy raised the maximum amount it targeted at a bond auction.

The IMF urged Europe for a successful resolution of the sovereign debt crisis. The lender urged for deeper fiscal and financial integration across Europe to underpin the sustainability of the common currency.

The impasse between Greece and its private lenders continues with no solution so far regarding the debt swap ratio. Talks resume today to resolve the deadlock.

Finance ministers in the euro zone agreed to set up a permanent rescue fund as early June after a 2-day meeting this week but remain far apart with the size of the fund. The leaders hope to set up a fund with as much as €700 billion to €1 trillion but Germany resisted the calls to increase the size above €500 billion.

The Italian Treasury sold €4.5 billion worth of 2-year bonds at the high end of its target.

Asian markets edged higher.

U.S. Weekly Jobless Claims Rise

First-time claims for U.S. unemployment benefits increased in the week ended January 21st, according to a report released by the U.S. Labor Department today. The claims had declined to nearly a four-year low in the previous week.

The report said jobless claims rose to 377,000 from the previous week''s revised figure of 356,000, representing the lowest level of jobless claims since April of 2008 and remaining below the key 400,000 level.

U.S. Durable Goods Orders Climb

New orders for U.S. durable goods increased by more than anticipated in the month of December, according to data released by the U.S. Commerce Department today.

The report showed that durable goods orders increased 3% to $214.5 billion in December compared to a revised 4.3% increase in November. The core orders that include machinery and other durable goods but excludes volatile transportation and defense orders increased 2.9%.

The increase in new orders was driven in part by a 5.5% increase in orders for transportation equipment, which largely reflected an 18.9% increase in orders for civilian aircraft.

Excluding an increase in orders for transportation equipment, durable goods orders rose 2.1% in December.

U.S. New Home Sales Fall

New home sales in the U.S. declined more than anticipated in December. Sales of new single-family homes came in at a seasonally adjusted annual rate of 307,000 for December, a 2.2% drop from the revised November rate of 314,000.

U.S. Leading Economic Index Improves

The Conference Board said its leading economic index for the U.S. increased 0.4% in December following a revised 0.2% rise in November.

Amgen to Acquire Micromet

Amgen will acquire Micromet, a biotechnology company in Germany for $11 per share in cash that valued the company at $1.16 billion.

Earnings Review

AT&T Inc. ((T)), the provider of telecommunications services reported fourth quarter total operating revenues rose 3.6% to $32.50 billion from $31.36 billion last year. Net loss in the quarter was $6.68 billion or $1.12 a share compared to net income of $1.09 billion or 18 cents a share in the year-ago period.

The company added a net 2.5 million wireless subscribers in the quarter, taking the total to 103.2 million subscribers in service, and also sold 9.4 million smartphones in the quarter.

For 2011 as a whole, revenues rose 2% to $126.72 billion from $124.28 billion in the previous year. Net income for the year slumped 80% to $3.94 billion or 66 cents per share from $19.86 billion or $3.35 per share in the prior year.

Colgate-Palmolive Company ((CL)), the consumer products maker said fourth quarter net sales rose 5% to $4.17 billion from $3.98 billion in the fourth quarter 2010. Net income in the quarter declined 5.4% to $590 million or $1.21 per diluted share compared to net income of $624 million or $1.24 per share last year.

For the year as a whole, net income rose to $2.43 billion or $4.94 a share from $2.20 billion or $4.31 a share. Sales climbed to $16.73 billion from $15.56 billion.

3M Company ((MMM)), the diversified technology company reported fourth quarter net sales rose 5.7% to $7.09 billion from $6.71 billion generated in the prior-year quarter. Net income in the quarter increased 2.8% to $954 million or $1.35 a share compared to net income of $928 million or $1.28 a share in the same quarter last year.

For the full year 2011, the company sales rose 11.1% to $29.6 billion up from $26.7 billion. Net income for the period gained 4.8% to $4.23 billion or $5.96 per diluted share from $4.1 billion or $5.63 per share in the prior year.