U.S. and World Markets Trade Lower on Euro Zone Worries

Arthi Gupta
23 May, 2012
New York City

U.S. and global indexes slumped as Greece and Europe bond stress regained investor focus. Google completed acquisition of Motorola Mobility. Scotiabank agreed to sell Scotia Plaza for approximately $1.27 billion.

[R]8:50 AM New York – U.S. and global indexes slumped as Greece and Europe bond stress regained investor focus. Google completed acquisition of Motorola Mobility. Scotiabank agreed to sell Scotia Plaza for approximately $1.27 billion.[/R]

Stocks in New York trading were on the defensive after a two-day rally in tech stocks and banks. Investors were cautious as European leaders of 27 nations in the E.U. gather this evening to discuss Greece and prepare for a meeting in June after the Greek elections.

The dollar traded higher against the euro as bond yields in Europe rose for Spain and France and German yields were near historic low as investors preferred the safety of German bunds.

Stocks were also defensive in New York trading after Dell reported weaker than expected earnings and sales fell as it struggled to hold market share from the resurgent Apple Inc and lacked mobile device in the fast growing smartphone segment.

In Asia, the Bank of Japan left its monetary policy unchanged but unanimously decided to retain the key uncollateralized overnight call rate range between zero and 0.1%. The size of the asset purchase and credit facility was also left unchanged at 40 trillion yen and 30 trillion yen respectively.

Google Acquires Motorola Mobility

Google, Inc., the Internet search provider completed the acquisition of Motorola Mobility Holdings, Inc. for $40 a share in an all-cash deal of about $12.5 billion.

The acquisition will enable Google to accelerate its Android system development to increase penetration in the fast growing smart phone segment.

Scotiabank Agrees to Sell Scotia Plaza

The Bank of Nova Scotia agreed to sell its interest in the Scotia Plaza complex to Dundee REIT and H&R REIT for approximately $1.266 billion. The sale is expected to close on June 20.

Earnings Review

Analog Devices, Inc. ((ADI)), the chip-maker said second quarter revenues slumped 15% to $675.09 million from $790.78 million last year. Net income for the quarter fell 33% to $162.90 million or 53 cents per diluted share compared to net income of $241.83 million or 78 cents per share last year.

Big Lots, Inc. ((BIG)), the closeout retailer said first quarter net sales rose 5.5% to $1.29 billion compared with $1.23 billion in the earlier year quarter. Net income for the quarter fell 22% to $40.75 million or 63 cents per share compared to net income of $52.47 million or 70 cents per share a year before.

Dell Inc. ((DELL)), the computer maker said first quarter revenue fell 4% $14.42 billion from $15.02 billion in the same quarter last year. Net income for the quarter declined 33% to $635 million or 36 cents per share compared to net income of $945 million or 49 cents per share in the prior-year quarter.

Toll Brothers, Inc. ((TOL)), the luxury homebuilder reported second quarter revenues rose 17% to $373.7 million from $319.7 million in the prior-year quarter. Net profit in the quarter swung to $16.9 million or 10 cents per share compared to a loss of $20.8 million or 12 cents per share last year.

Home units climbed 14% from a year ago to 671 from 591 homes a year earlier.