U.S. Private Sector Adds 209,000 Jobs; World Indexes Falter

Arthi Gupta
04 Apr, 2012
New York City

U.S. indexes dropped more than 1% despite private sector added more than 200,000 jobs in March and bond yields perked up in Europe. 3G Capital sold 29% stake in Burger King for about $1.4 billion. SanDisk lowered first quarter revenue guidance.

[R]10:25 AM New York – U.S. indexes dropped more than 1% despite private sector added more than 200,000 jobs in March and bond yields perked up in Europe. 3G Capital sold 29% stake in Burger King for about $1.4 billion. SanDisk lowered first quarter revenue guidance.[/R]

Stock indexes in New York dropped more than 1% in early trading after dashed hopes of third economic stimulus and rising bond yields in the European bond markets.

The sentiment was weak despite the higher than expected monthly private sector jobs addition in March.

European market sentiment worsened after Spanish bond yield rose and Portugal faced more scepticism and on the prospect of Greece style restructuring.

The country indexes dropped more than 1% in stock trading after Spain proposed tough budgetary measures and sharp reduction in spending as the nation struggles with recession and record unemployment but that failed to convince the bond market and yield perked up. The yield of 10-year Spanish bonds increased 25 basis points to 5.7%.

The ECB held rates unchanged for the fourth month in a row in April. Spain raised €2.6 billion from a debt auction today as borrowing costs rose and Portugal entered the bond market and sold €1 billion of 18-month T-bills, its longest maturity debt since the government bailout.

Euro area private sector contracted in March and retail sales fell in February.

Australia’s seasonally adjusted trade deficit fell to A$480 million in February from a revised A$971 million in January, the latest data from the Australian Bureau of Statistics showed today. The second consecutive monthly deficit was the first after two years on the lower than expected exports of materials and coal.

U.S. Private Sector Payrolls Up

Employment in the U.S. private sector climbed in March, according to a latest private sector jobs estimate released by Automatic Data Processing today.

ADP said employment increased by 209,000 jobs in March following an upwardly revised increase of 230,000 jobs in February.

The report also showed that small and medium-size businesses added 100,000 jobs and 87,000 jobs, respectively, while large businesses added 22,000 jobs.

3G Capital Sells Stake in Burger King

3G Capital, a global investment firm and Burger King Worldwide Holdings, Inc.’s principal stockholder agreed to sell a 29% stake in it to U.K.-based investment vehicle Justice Holdings Ltd. for about $1.4 billion in cash.

Following the closure of the deal, 3G Capital will continue as a major shareholder by retaining a 71% stake in the combined entity to be called Burger King Worldwide, Inc.

The newly formed entity is expected to be listed on the New York Stock Exchange.

Earnings Review

Acuity Brands, Inc. ((AYI)), the lighting fixtures maker reported second quarter net sales rose 10% to $457.7 million from $416.1 million last year. Net income for the quarter fell 2% to $19.5 million compared to net income of $19.9 million last year.

Earnings per share grew to 46 cents from 45 cents a year ago.

Monsanto Company ((MON)), the provider of agricultural products stated second quarter net sales climbed 15% to $4.75 billion compared to $4.13 billion last year. Net in the quarter increased 18.6% to $1.21 billion or $2.24 per share from $1.02 billion or $1.88 per share in the prior year.

SanDisk Corporation ((SNDK)), the flash-memory card maker lowered first quarter revenue estimate to $1.2 billion compared to the prior estimate revenue range of $1.30 billion to $1.35 billion.

Walgreen Copany ((WAG)), the drugstore chain operator reported that total sales, including stores open less than a year, decreased 4.3% to $6.02 billion in March, from $6.29 billion in the same period of last year. Total comparable store sales declined 6.8% in March.