U.S. Manufacturing Improves, Construction Spending Drops

Arthi Gupta
02 Apr, 2012
New York City

U.S. indexes rebounded after manufacturing sector activity rose in March. U.S. construction spending fell in February. Avon rebuffed $10 billion Coty takeover offer. Dow Chemical to cut 900 jobs worldwide.

[R]11:45 AM New York – U.S. indexes rebounded after manufacturing sector activity rose in March. U.S. construction spending fell in February. Avon rebuffed $10 billion Coty takeover offer. Dow Chemical to cut 900 jobs worldwide.[/R]

U.S. indexes recovered after manufacturing improved in March but construction spending was weaker-than-estimated in February.

Stocks in early morning rose but market indexes faded in the afternoon after unemployment rose in the last month. Market momentum was positive after China reported better than expected manufacturing growing easing fears of abrupt slowdown.

The China Federation of Logistics and Purchasing said that the purchasing managers' index improved to 53.1 in March from 51 in February, the highest since March last year.

U.S. Construction Spending Drops

U.S. construction spending fell in February, according to data released by the U.S. Commerce Department today.

U.S. construction spending decreased 1.1% at an annual rate of $808.9 billion in February from the revised January estimate of $818.1 billion and rose 5.8% from a year ago spending of $764.2 billion.

U.S. Manufacturing Index Rises

Activity in the U.S. manufacturing sector rose in March, according to a report released by the Institute for Supply Management today.

The ISM said its index of activity in the manufacturing sector climbed to 53.4 in March from 52.4 in February.

Avon Rebuffs Coty Offer

Coty, Inc., the privately held cosmetic maker proposed to acquire cosmetics maker Avon Products, Inc. for $23.25 a share in an all-cash deal valued at about $10 billion.

The offer price of $23.25 per share represents a 20% premium to Avon's closing price of $19.36 on Friday.

However, Avon immediately rejected the unsolicited bid, deeming the offer as ""opportunistic and not in the best interest of Avon's shareholders.""

Coty said its several approaches to Avon in the last two months were rebuffed by its long time chief executive Andrea Jung and the company board.

Dow Chemical to Cut Jobs

The Dow Chemical Company announced today that it is closing certain manufacturing plants in Europe, North America and Latin America, as well as canceling a selection of capital projects and implementing workforce reductions in response to continued weakness in the European economy.

The company anticipates that approximately 900 positions will be eliminated worldwide and in the first quarter.

Dell to Acquire Wyse Technology

Dell Inc. agreed to acquire Wyse Technology, a cloud client computing company to extend its desktop virtualization offerings. Financial terms of the deal were not disclosed.

Earnings Review

Global Payments Inc. ((GPN)), the provider of electronic payments transaction processing services reported third quarter revenues rose 17% to $533.5 million from $456.4 million in the prior fiscal year. Net income in the quarter increased 21% to $57.92 million or 73 cents per diluted share compared with net income of $47.79 million or 59 cents per share last year.

Groupon Inc. ((GRPN)), the online discount site restated its fourth quarter results. The revisions resulted in a reduction to fourth quarter 2011 revenue of $14.3 million, net income by $22.6 million and earnings per share by $0.04.