U.S. Private Employment Rises; CBO Projects $1.1 T Deficit

Arthi Gupta
01 Feb, 2012
New York City

The U.S. indexes gained after employment in the U.S. private sector grew in January The Congressional Budget Office projected a $1.1 trillion federal budget deficit for fiscal year 2012. Mattel completed acquisition of HIT Entertainment for $680 million.

[R]10:15 AM New York – The U.S. indexes gained after employment in the U.S. private sector grew in January The Congressional Budget Office projected a $1.1 trillion federal budget deficit for fiscal year 2012. Mattel completed acquisition of HIT Entertainment for $680 million.[/R]

U.S. indexes gained after private sector employment in January and rising speculation about the Facebook offering document.

European markets traded higher after investors shifted their attention to the Greek negotiations and better than expected manufacturing data from China. Hopes ran high that the European Central Bank will agree to the Greek bond restructuring and accept the 50% loss in the bond prices from its face value.

Germany and Portugal completed bond auctions at lower yields. The European Commission blocked the proposed merger of NYSE Euronext with Deutsche Boerse.

Euro-zone annual inflation remained unchanged at 2.7% in January.

Asian markets traded mixed.

However, China''s official Purchasing Managers Index unexpectedly rose to 50.5 in January from 50.3 in December, according to data released by the China Federation of Logistics and Purchasing.

U.S. Private Sector Employment Rises

Employment in the U.S. private sector grew in January, according to a report released by payroll processor Automatic Data Processing, Inc. today.

ADP said employment in the non-farm private business sector rose by 170,000 jobs in January following a revised increase of 292,000 jobs in December.

U.S. Budget Deficit Estimates

The Congressional Budget Office projects that the 2012 federal budget deficit will be about $1.1 trillion, and that the economy will continue its sluggish recovery, with unemployment remaining above 8% both this year and next.

The projected deficit represents 7% of U.S. GDP that is nearly 2 percentage points below the deficit recorded in 2011 but still higher than any annual deficit between 1947 and 2008.

Mattel Completes Acquisition of HIT Entertainment

Mattel, Inc. said it completed the acquisition of HIT Entertainment from a consortium of funds led by Apax Partners for $680 million in cash.

The acquisition combines Mattel''s global marketing, distribution and brand management capabilities with HIT Entertainment''s global programming and licensing expertise to accelerate growth of the combined portfolio.

Earnings Review

Aetna, Inc. ((AET)), the diversified healthcare benefits company reported fourth quarter revenues, excluding net realized capital gains, edged up 0.4% to $8.54 billion from $8.51 billion in the same quarter last year. Net income in the quarter surged 73% to $372.6 million or $1.02 per diluted share compared to net income of $215.6 million or 53 cents per share in the year-ago quarter.

Revenues for fiscal year 2011, excluding net realized capital gains, edged down 1.2% to $33.61 billion from $34.02 billion in the previous year. Net income for the full year gained 12.4% to $1.99 billion or $5.22 per share, higher than $1.77 billion or $4.18 per share in the prior year.

Northrop Grumman Corp. ((NOC)), the aerospace and defense company reported fourth quarter total sales declined 6% to $6.51 billion from $6.90 billion in the previous-year quarter. Net earnings in the quarter surged 46% to $548 million or $2.09 per share compared to net earnings of $376 million or $1.27 per share in the year-ago period.

For fiscal year 2011, sales declined 6% to $26.41 billion from $28.14 billion in the prior year. Net earnings for the year increased 3.4% to $2.12 billion or $7.52 per share from $2.05 billion or $6.82 per share last year.

Whirlpool Corporation ((WHR)), the appliance maker reported fourth quarter sales fell 2% to $4.9 billion compared to $5.0 billion reported in the fourth quarter of 2010. Net earnings in the quarter climbed 20% to $205 million, or $2.62 per diluted share compared to net earnings of $171 million, or $2.19 per diluted share reported during the same period last year.

Full-year 2011 sales reached $18.7 billion, up 2% from $18.4 billion the prior year. Net earnings for the year were $4.99 per diluted share compared to $7.97 per diluted share reported for 2010.