Durable Orders Rise 2.2%; Pentair, Tyco Flow in $10 B Merger

Nichole Harper
28 Mar, 2012
New York City

Stocks in New York were little changed in early trading after durable goods orders rose less than expected in February. Civilian aircraft orders increased 1.6% in the month. Pentair soared 18% after it agreed to merge with flow and control business of Tyco values at $4.6 billion.

[R]10:35 AM New York – Stocks in New York were little changed in early trading after durable goods orders rose less than expected in February. Civilian aircraft orders increased 1.6% in the month. Pentair soared 18% after it agreed to merge with flow and control business of Tyco values at $4.6 billion.[/R]

After one hour of trading in New York, stocks searched for direction after durable goods orders rose less than expected in February and an index of future business investment failed to meet expectations.

Durable Goods Orders Rise 2.2%

Durable goods orders increased 2.2% last month and recovered partially 3.6% fall in January according to the latest data released by the Commerce Department today.

The less than expected increase was driven by 1.6% increase in orders excluding transportation orders. Machinery orders gained 5.7% and non-defense capital goods orders excluding aircraft gained 1.2%.

Transportation orders increased 3.9% and civilian aircraft orders added 6%, however manufacturing are struggling to increase capacity especially in the mining equipment sector.

Non-defense capital goods orders excluding aircraft which are included in gross domestic product added 1.4%.

Unfilled orders for durable orders increased 1.3% and for non-defense orders excluding aircrafts increased 0.7%.

European Indexes Lower

European indexes declined and UK revised fourth quarter GDP shrink to 0.3% and German inflation in March eased.

Italy auctioned €8.5 billion of 6-month bills at lower yields. The yield for dropped to its lowest since September 2010.

Moody's Investors Service affirmed Germany's Aaa government bond rating and stable outlook.

Arcelor Sells Turkish Stake, Foxconn Invests in Sharp

In Tokyo trading Sharp soared 16% to 570 yen after it agreed to sell a stake in the company to Taiwan based Hon Hai and its founder Terry Gou for 133 billion yen or $806 million.

Hon Hai hopes to leverage advanced TV technology with its manufacturing to build the next generation of video products. Hon Hai Precision Industry trades as Foxconn Technology.

Stock Mover

ArcelorMittal SA dipped 0.2% to €14.65 after the steel company completed the sale of partial stake in Turkish steelmaker as the company focuses in lowering debt. After the sale stake in Erdemir declined to 18.7% from 12.5%.

Arcelor sold 134.3 million shares and warrants in Ereðli Demir ve Çelik Fabrikalarý T.A.Þ. for 478.2 million Turkish lira or $268 million.

Pentair, Inc surged 18% to $47.42 in New York trading after it agreed to merge with the soon-to-be spun off flow and control business of Tyco. The combined business will have $7.7 billion in revenues and will be owned 52.5% by Tyco shareholders and Pentair will control 47.5%.

The combined company will be headquartered in Switzerland where Tyco is incorporated and expects its adjusted net profit to increase by 40 cents in 2013 and annual profit to pass $5 a share in 2015 on cost reductions and merger synergy. The merged entity will begin with 30,000 employees worldwide.

The valves and controls maker for energy, mining and water industries will have its main office in Minnesota.