Facebook Lifts IPO Price Range; Mixed U.S. Economic Data

Arthi Gupta
15 May, 2012
New York City

U.S. indexes climbed after retail sales rose and consumer prices remained flat in April. Facebook raised the price range of its initial public offering. Coty withdrew $10.7 billion takeover bid for Avon Products.

[R]9:35 AM New York – U.S. indexes climbed after retail sales rose and consumer prices remained flat in April. Facebook raised the price range of its initial public offering. Coty withdrew $10.7 billion takeover bid for Avon Products.[/R]

U.S. indexes gained after mixed economic data and retail sales edged higher but consumer prices were flat in April.

The European indexes rose after the German economy expanded more than estimated in the first quarter. However, the euro area economic growth was ground to zero and the region narrowly avoided recession in the first quarter despite economic advance in Germany.

François Hollande was sworn in as the new President of France today and in a short speech focused on the difficult task ahead and noted that the country “cannot have sacrifices on one side and privilege on the other.”

Greek president Karolos Papoulias and political leaders are struggling to agree on unity government as none of the three leading parties appear to compromise.

Asian markets traded mixed on the ongoing political turmoil in Greece. Foreign direct investment in China declined for the sixth consecutive month in April, the Ministry of Commerce said today.

Investment declined 0.74% from the prior year, slower than the 6.1% decline in March. Investment totaled $8.4 billion in April.

U.S. Retail Sales Rise

U.S. retail sales edged higher 0.1% in April following a revised 0.7% increase in March, according to a report released by the U.S. Commerce Department today.

Excluding a 0.5% increase in auto sales, retail sales climbed 0.1% in April compared to a 0.8% increase in March.

Separately, activity in the New York manufacturing sector accelerated in May, according to a report released by the Federal Reserve Bank of New York.

The New York Fed said its general business conditions index soared to 17.1 in May from 6.6 in April.

U.S. Consumer Prices Stable

Consumer prices in the U.S. were flat in April following an increase of 0.3% in March, according to a report released by the U.S. Department of Labor today. Consumer prices increased 2.3% in April compared to last year.

Energy prices decreased 1.7% from a month earlier in April, led by a 2.6% fall in gasoline prices.

Core consumer prices, which exclude the volatile food and energy sectors, rose 0.2%.

Food prices rose 0.2% in April.

OECD Unemployment Flat

Unemployment in the Organization for Economic Cooperation and Development area remained unchanged 8.2% in March, latest data showed.

In the United States, the unemployment rate fell to 8.2% in March from 8.3% in February.

Facebook Raises IPO Price Range

Facebook, Inc., the social media site increased the price range of its initial public offering to $34 to $38 per share from the current $28 to $35 a share range, according to a regulatory filing today.

Facebook is expected to raise around $12.8 billion, seeking a valuation of $104.2 billion.

Coty Withdraws Avon Takeover Bid

Coty Inc., the fragrance maker said that it has withdrawn its $10.7 billion takeover bid for Avon Products Inc., as the deadline set by the company to begin talks expired today.

Coty said it withdrew the proposal due to the reluctance shown by Avon''s board to “explore a friendly, negotiated combination on a reasonable timetable.”

Earnings Review

Dick’s Sporting Goods, Inc. ((DKS)), the sporting goods retailer reported first quarter net sales rose 15.3% to $1.28 billion from $1.11 billion in the prior-year quarter. Net income in the quarter surged 52.4% to $57.16 million or 45 cents per diluted share compared to net income of $37.5 million or 30 cents per share a year ago.

Saks Inc. ((SKS)), the retailer said first quarter net sales improved 3.8% to $753.61 million from $726.0 million in the comparable period in 2011. Net income in the quarter grew 13% to $32.1 million 18 cents per diluted share compared to net income of $28.4 million or 16 cents per share last year.

The Carlyle Group, L.P. ((CG)), the private investment firms said first quarter revenues fell 16% to $1.11 billion from $1.32 billion in the earlier year quarter. Net income in the quarter dropped 30% to $629.2 million compared to net income of $896.2 million in the prior-year quarter.

The Home Depot, Inc. ((HD)), the home improvement retailer reported first quarter net sales grew 5.9% to $17.81 billion from $16.82 billion a year ago. Comparable same store sales for the quarter rose 5.8% and for the U.S. stores increased 6.1%.

Net earnings in the quarter increased 28% to $1.04 billion or 68 cents per diluted share compared to net earnings of $812 million or 50 cents per diluted share, in the same period of fiscal 2011.