Wall Street Higher Ahead of Facebook Debut

Arthi Gupta
18 May, 2012
New York City

U.S. indexes climbed in early trading ahead of Facebook debut and traders focus on the meeting of the Group of Eight leading nations that begins today. The euro edged lower and commodities traded volatile.

[R]9:40 AM New York – U.S. indexes climbed in early trading ahead of Facebook debut and traders focus on the meeting of the Group of Eight leading nations that begins today. The euro edged lower and commodities traded volatile.[/R]

U.S. indexes gained in early cautious trading as much anticipated Facebook debuts on Nasdaq today. However, sentiment in the euro zone worsened and Asian markets plunged in overnight trading.

The European indexes declined for the fourth week in a row as Greece prepares for another election and economic sentiment in the region weakens. German output price inflation eased to 22-month low in April.

Investors are also looking ahead at the meeting of the Group of Eight leading nations in Maryland that begins today.

Separately, ratings agency cut debt ratings of 16 Spanish banks and the long term credit rating of Greece was also lowered.

Asian markets declined on euro zone worries and the Nikkei in Tokyo dropped 3% and market indexes in Hong Kong, Shanghai, Seoul, Bangkok and Sydney plunged between 1.3% and 3%. However, the Sensex in India gained but traded near the low of the year.

Facebook Debuts on Nasdaq

Facebook Inc.’s shares will begin trading on the Nasdaq Stock Market around 11 a.m. ET today with the symbol FB.

The company sold 421.2 million shares at $38 each to raise $16 billion, giving the online social network a value of $104 billion.

Facebook Inc. priced its initial public offering at $38 per share, at the top end of its estimated price range of $34 to $38.

ArcelorMittal Sells Businesses to Nucor

ArcelorMittal S.A. announced the sale of its steel foundation distribution business operating in North America to Nucor Corporation for about $605 million on a debt free and cash free basis.

The transaction is expected to be completed by the end of the second quarter of 2012 as ArcelorMittal sells assets to cut its debt.

DSM to Acquire Ocean Nutrition Canada

Royal DSM, the global life sciences company entered into an agreement with Clearwater Fine Foods and funds managed by Richardson Capital to acquire Ocean Nutrition Canada for a total enterprise value of C$540 million.

Earnings Review

Aeropostale, Inc. ((ARO)), a teenage apparel retailer said first quarter net sales rose 6% to $497.2 million from $469.2 million in the year ago period. Comparable sales, including direct sales increased 2% compared to a 5% decrease last year.

Net income in the quarter fell 35.4% to $10.6 million or 13 cents per diluted share compared to net income of $16.4 million or 20 cents per share last year.

Donaldson Company, Inc. ((DCI)), the filtration systems maker reported third quarter net sales climbed 9% to $647 million from $595 million in the prior year. Net earnings in the quarter increased 15% to $71 million or 46 cents per diluted share compared to net earnings of $62 million or 39 cents per share reported a year ago.

Foot Locker, Inc. ((FL)), the specialty athletic retailer reported first quarter sales rose 8.7% to $1.58 billion from $1.45 billion for the prior-year period. Comparable-store sales rose 9.7%.

Net income in the quarter gained 36% to $128 million or 83 cents per diluted share compared to net income of $94 million or 60 cents per share last year.

Hibbett Sports, Inc. ((HIBB), the operator of sporting goods retail stores said first quarter net sales grew 14.4% to $232.91 million from $203.7 million a year ago. Comparable-store sales rose 11.1%.

Net income in the quarter rose 23.5% to $26.4 million or 98 cents per diluted share compared to net income of $21.3 million or 76 cents per share last year.