U.S. Retail Sales Rise; Homebuilder Confidence Falls

Arthi Gupta
16 Apr, 2012
New York City

U.S. indexes traded sideways and retail sales rose more than estimated in March. Home builder confidence declined in April. Goldman Sachs agreed to sell ICBC stake to Temasek for $2.3 billion. Stratasys and Objet agreed to merge in a $1.4 billion all-stock transaction.

[R]11:10 AM New York – U.S. indexes traded sideways and retail sales rose more than estimated in March. Home builder confidence declined in April. Goldman Sachs agreed to sell ICBC stake to Temasek for $2.3 billion. Stratasys and Objet agreed to merge in a $1.4 billion all-stock transaction.[/R]

U.S. indexes traded sideways after mixed economic data. Retail sales and business inventories rose but homebuilder confidence declined in April.

European indexes gained after see-sawing in early morning trading. Spain was in focus after yields rose above 6%, the record high for the year and raising prospects of anther debt squeeze in the euro zone. The credit default swap for Spanish 5-year debt shot up to a new high and premium to the German bund rose to a high seen last in summer of 2011.

Asian stocks traded lower tracking U.S. and European indexes.

The Bank of Korea lowered its economic growth outlook for the nation to 3.5% increase in the current year compared to the 3.7% growth forecast in December.

U.S. Retail Sales Rise

U.S. retail sales rose a seasonally adjusted 0.8% to $411.1 billion in March, according to data released by the U.S. Commerce Department today.

Excluding the increase in auto sales, retail sales still rose 0.8% in March following a 0.9% increase in February.

Separately, the New York Fed said its general business conditions index slumped to 6.6 in April from 20.2 in March.

The new orders index also slipped to 6.5 in April from 6.8 in March.

U.S. Business Inventories Climb

U.S. business inventories rose 0.6% on a seasonally adjusted basis to $1.5778 trillion in February, following a revised 0.8% gain in January, according to data released by the U.S. Commerce Department.

U.S. Homebuilder Confidence Falls

Homebuilder confidence in the U.S. declined in April, according to a report released by the National Association of Home Builders today.

The report showed that the NAHB/Wells Fargo Housing Market Index dropped to 25 in April from 28 in March.

Goldman Sachs to Sell ICBC Stake

Goldman Sachs Group, Inc. plans to sell 3.55 billion of its H-shares in Industrial & Commercial Bank of China Ltd. to Singapore state-owned investment group Temasek Holdings Pte for $2.3 billion.

Temasek is buying the shares at HK$5.05 per share, which represents a discount of 3.1% to their Friday closing price of HK$5.21.

Stratasys and Objet Agree to Merge

Stratasys, Inc., a manufacturer of 3D printers and production systems for prototyping and manufacturing applications, and privately held Objet Ltd. have unanimously approved a merger agreement under which the companies would combine in an all-stock transaction with a combined equity value of approximately $1.4 billion.

Earnings Review

Charles Schwab Corp. ((SCHW)), the brokerage and investment manager said first quarter total net revenues fell 1.7% to $1.19 billion from $1.21 billion in the comparable period last year. Net income in the quarter declined 19.8% to $195 million or 15 cents per diluted share compared to net income of $243 million or 20 cents per share in the prior-year quarter.

Citigroup Inc. ((C)), the diversified financial services holding company reported first quarter revenue slipped 2% to $19.41 billion from $19.73 billion a year earlier. Net income in the quarter declined 2.3% to $2.93 billion or 95 cents per diluted share compared to net income of $3.0 billion or $1 a share a year ago.

Mattel, Inc. ((MAT)), the toy maker reported first quarter net sales declined 2% to $928.4 million from $951.9 million a year earlier. Net income in the quarter slumped 53% to $7.8 million or 2 cents per diluted share compared to net income of $16.6 million or 5 cents per share reported in the previous year.