Greek Worries Drag U.S., Global Indexes; Coca-Cola Net Slumps 71%

Arthi Gupta
07 Feb, 2012
New York City

The U.S. indexes fell on the ongoing euro zone debt crisis and protracted Greek negotiations. Tensions rose in the Middle East as Western nations accelerate spy activities in Syria and the U.S. freeze Iranian sanctions. Coca-Cola quarterly earnings slumped 71% and Toyota lifted its annual view.

[R]10:25 AM New York – The U.S. indexes declined on the ongoing debt crisis in the euro zone and protracted negotiations in Greece. Tensions rose in the Middle East as Western nations accelerate spy activities in Syria and the U.S. freeze Iranian sanctions. Coca-Cola quarterly earnings slumped 71% and Toyota lifted its annual outlook.[/R]

U.S. indexes and global markets traded lower as tensions in the Middle East tensions rose, Greece descends into more strikes and political leaders demand quick resolutions to Greek debt talks.

French President Sarkozy and German Chancellor Angela Merkel in a joint interview with ""France 2"" television warned the Greek politicians needed to come to a resolution soon and time is of the essence.

Greece is on the verge of a default if it is unable to repay €14.5 billion in bonds on March 20.

EU officials have set February 15 as the deadline for the approval of austerity measures. However Greek political parties are at odds in agreeing to labor reforms demanded by the troika. At least three separate strikes were called in Athens today and most of the transportation network was grounded to a halt.

Investors will focus on the Federal Reserve Chairman Ben Bernanke''s testimony before the Senate Banking Committee due today.

The Reserve Bank of Australia decided to keep its benchmark cash rate unchanged at 4.25% on Tuesday.

The government expects the economy to grow 3.25% this fiscal year as well as the next.

Toyota reported a sharp increase in operating income for the third quarter, and also lifted its fiscal year 2012 outlook.

The Indian government estimates the economy to rise 6.9% during the financial year ending March 2012, slower than the 8.4% growth recorded in fiscal 2010-11, the Central Statistics Office said today.

Glencore and Xstrata Confirm Agreement

Switzerland based Glencore International agreed to acquire London listed Xstrata for £39.1 billion in the largest mining industry merger.

Glencore valued the Xstrata at 1,290 pence a share and it will control 55% of the newly merged entity Glencore Xstrata International Plc. The combined entity will have $209 billion in revenues and will rival with the two largest Australian mining giants BHP Billiton and Rio Tinto.

Earnings Review

Emerson Electric Co. ((EMR)), the diversified global technology company reported first quarter net sales decreased 4% to $5.31 billion from $5.54 billion in the same quarter last year. Net earnings in the quarter declined 23% to $371 million or 50 cents per diluted share compared to net earnings of $480 million or 63 cents per share in the prior-year quarter.

Perrigo Company ((PRGO)), the generic drugmaker reported second quarter net sales rose 17% to $838.17 million from $717.52 million in the prior year quarter. Net income in the quarter increased 11% to $99.74 million or $1.06 per share compared to net income of $90.17 million or 97 cents per share in the same quarter last year.

The Coca-Cola Company ((KO)), the non-alcoholic beverage company reported fourth quarter net operating revenues increased 5% to $11.04 billion from $10.50 billion in the same quarter last year. Net income in the quarter plunged 71% to $1.65 billion or 72 cents per diluted share compared to net income of $5.77 billion or $2.46 per share in the prior-year quarter.

Net operating revenues for fiscal year 2011 grew 33% to $46.54 billion from $35.12 billion in the previous year. For the full year, the company reported net income of $8.57 billion or $3.69 per share, 27% lower than $11.81 billion or $5.06 per share in the prior year.