Greece Weighs on U.S., Global Indexes

Arthi Gupta
08 May, 2012
New York City

U.S. indexes edged lower as Greece struggles to form the next government and avoid a default before next bailout disbursement. Electronic Arts net income soared and Direct TV quarterly net gained 9%. However, OfficeMax net was cut by more than half.

[R]9:35 AM New York – U.S. indexes edged lower as Greece struggles to form the next government and avoid a default before next bailout disbursement. Electronic Arts net income soared and Direct TV quarterly net gained 9%. However, OfficeMax net was cut by more than half.[/R]

U.S. and European indexes declined as Greek leaders negotiate to form the next government. Greece is facing a difficult task of balancing between the demands of the international lenders to cut spending and voters’ expectations of economic growth and a sharp cut in unemployment.

Greece’s New Democracy leader Antonis Samaras failed to reach an agreement to form a coalition government and the president invited Alexis Tsipras, the head of Syriza, the party with the second largest group of seats in the newly elected parliament.

However, Germany''s seasonally adjusted industrial output rose 2.8% from a month ago in March following a 0.3% drop in February, data from the Federal Ministry of Economy and Technology showed today.

Capital goods production increased 2%, while growth in intermediate goods industry was at 0.3% in March.

The Asian markets traded mixed tracking weak U.S. and European indexes and Australia released its latest budget after the market close that estimated return to a surplus after four years of deficit.

Treasurer Wayne Swan released the latest budget that estimated $1.5 billion of cash surplus or 0.2% of GDP in the next fiscal year.

The budget calls for spending cuts for the first time in 42 years, increase government debt ceiling to A$300 billion from A$250 billion and aims to spread the mining boom to help low and middle income families through increased payments to families.

Earnings Review

Directv Inc. ((DTV)), the provider of satellite TV services reported first quarter revenues rose 11.6% to $7.05 billion from $6.32 billion in the prior year quarter. Net income in the quarter increased 8.5% to $731 million or $1.07 per diluted share compared to net income of $674 million or 85 cents per share in the same quarter last year.

Electronic Arts Inc. ((EA)), the video-game publisher said fourth quarter net revenue rose 26% to $1.37 billion from $1.09 billion a year ago. Net income in the quarter soared 165% to $400 million or $1.20 per share compared to net income of $151 million or 45 cents per share for the year-ago quarter.

OfficeMax Incorporated ((OMX)), the office supplies retailer reported first quarter sales edged higher 0.5% to $1.87 billion from $1.86 billion in the first quarter of 2011. Net income for the period slumped 57% to $4.9 million or 6 cents per diluted share compared to net income of $11.4 million or 13 cents per share last year.

Tenet Healthcare Corporation ((THC)), the investor-owned health care services company said first quarter net operating revenues rose 2.2% to $2.35 billion compared with $2.30 billion in the year earlier period. Net income in the quarter fell 20.5% to $58.0 million or 13 cents per diluted share compared to net income of $73 million or 14 cents per share last year.

Wynn Resorts, Limited ((WYNN)), the developer, owner and operator of destination casino resorts reported first quarter net revenue rose 4% to $1.31 billion compared to $1.26 billion last year. Net income in the quarter dropped 19% to $140.6 million or $1.23 per share compared to net income of $173.8 million or $1.39 per share last year.