Manufacturing Report Lifts US Indexes; UK Panel Lashes Out at Murdoch, Hinton

Bikram Pandey
01 May, 2012
New York City

U.S. indexes gained after latest manufacturing report suggested was better than expected. UK panel lashed out in a critical report at Rupert Murdoch found him unfit to run a major corporation and the report was highly critical of three former executives including ex publisher of Wall Street Journal.

[R]4:10 PM New York – U.S. indexes gained after latest manufacturing report suggested was better than expected. UK panel lashed out in a critical report at Rupert Murdoch found him unfit to run a major corporation and the report was highly critical of three former executives including ex publisher of Wall Street Journal.[/R]

U.S. indexes gained after a manufacturing report indicated expansion and widely followed averages gained. Banks, industrials and consumer linked stocks gained.

On the deal front, Mitsubishi and Mitsui agreed to buy minority stake in Australian LNG project for $2 billion. P.F. Chang's China Bistro agrees to a leverage buyout deal of $1.1 billion as the popular restaurant company struggled with the food and labor cost increase and stiff competition from low priced fast food chains.

In earnings news, Archer-Daniels third quarter net declined 31% to $399 million but was ahead of estimates. Avon first quarter net tumbled 82% on sales fall. Cummins first quarter net surged 33% to $455 million. Pfizer first quarter net dropped 19% to $1.79 billion.

UK based Thomson Reuters said quarterly earnings rose 25.6% to $314 million and the BP Plc reported quarterly profit declined 18% to $5.9 billion and revenues increased 9% to $97 billion.

Sears Holdings Corp jumped 17% after the retailer reported profit from the sale of some stores in the U.S. and Canada.

Across the Europe were closed for a public holiday and the UK indexes advanced after manufacturing activity eased and Irish manufacturing dropped in April. However, market focused on the latest UK parliamentary panel released highly critical report of hacking scandal and the subsequent cover up at News Corp.

The UK parliament panel found Chief Executive Rupert Murdoch unfit to run large multinational company and was unanimous in condemning three former executives. The panel members of all parties were especially distressed about the former chairman of News International, Les Hinton and said he was “complicit” in a cover up at the new paper group at the time of the scandal in the early part of this decade.

Hinton was subsequently appointed in 2007 as the Chairman of Dow Jones & Company and Publisher of Wall Street Journal and held one of the responsibilities of safeguarding journalism ethics at the company. Since the scandal unfolded and flow of hacking information escalated in 2011, Hinton was forced to retire protect the UK newspaper group but not to fix the systemic problems at the company.

The committee of members of parliament concluded that at the time of Hinton’s leadership, the culture at the company “permeated from the top” and “speaks volumes of about the lack of effective corporate governance at News Corporation and News International.”

After the release of the report, Hinton issued a statement and said he was shocked with the committee’s conclusion and “refuted these accusations utterly” but failed to explain his role in authorizing $365,000 payment to Clive Goodman, the former editor convicted of hacking in January of 2007.

Stocks in Japan dropped in thin trading after the yen strengthened. Exporters and automakers were among the leading decliners. Mitsubishi and Mitsui agreed to take the stake in Western Australia based natural gas field for $2 billion.

Australian stocks rallied after the Reserve Bank of Australia cut rates by 50 basis points. The market rally was short lived and trimmed gains after large banks failed to follow the move. Rupert Murdoch was deemed unfit to run UK newspaper business. Woodside sold a stake in its $2 billion Browse LNG field.

Commodities, Bonds and Currencies

The yields on 10-year U.S. bond increased to 1.95% and 30-year U.S. bond edged higher to 3.15%.

The U.S. dollar edged lower to $1.3236 to one euro and inched lower against the Japanese yen to 80.17 yen.

Immediate delivery futures of Texas crude oil increased $1.17 to $106.04 a barrel and Brent crude futures rose 12 cents to $119.58.

In New York trading, futures of natural gas increased 0.08 cents to $2.39 per mbtu and gasoline price fell 2.53 cents to 309.95 cents a gallon.

In metals trading, copper gained 1.2 cents to $3.84 per pound, gold fell $0.30 to $1,663.90 per ounce and silver decreased 0.1 cent to $31.01.