U.S. Indexes Rise, Marubeni to Acquire Gavilon for $3.6 B

Arthi Gupta
29 May, 2012
New York City

U.S. indexes gained and consumer confidence declined in May and home prices in metropolitan areas advanced in March. Japan-based Marubeni agreed to buy grain handler Gavilon for $3.6 billion. Icahn agreed to acquire 7.6% stake in Chesapeake.

[R]10:10 AM New York – U.S. indexes gained and consumer confidence declined in May and home prices in metropolitan areas advanced in March. Japan-based Marubeni agreed to buy grain handler Gavilon for $3.6 billion. Icahn agreed to acquire 7.6% stake in Chesapeake.[/R]

U.S. indexes traded higher after home prices in U.S. metropolitan areas rose in March from February for the first time in seven months and consumer confidence index declined in May.

Home prices increased in 12 of the 20 cities and in Miami and Tampa gained and in Las Vegas were flat, the three weakest markets in the nation. The prices continue to fall in Chicago, Atlanta and in Detroit but rose in Phoenix, Seattle and in Dallas when compared on a monthly basis.

Consumer confidence decreased to 64.9 in May, the lowest since December and was downwardly revised to 68.7 in April, according to the data tracked by the Conference Board. The latest survey showed that consumers were generally comfortable with the price increase but were less positive on job market conditions.

The European indexes pared gains after yields on Italian and Spanish bonds rose and Spanish retail sales slumped for the 22nd month in a row and the Bank of Spain estimated economy to weaken in the first half after shrinking by 0.3% in the quarter of the year.

Germany''s consumer price inflation slowed to 1.9% in May from 2.1% in April, data released by the Federal Statistics Office showed today.

Asian stocks edged higher after retail sales in Japan fell unexpectedly and jobless rate rose.

Retail sales in Japan fell 0.3% from a month ago in April following the 1.2% drop in March. A separate report showed that Japan''s jobless rate rose 0.1 points to 4.5% in April, as the number of employed people declined by 160,000.

Also, Panasonic planned to reduce its headquarters staff after the company battled falling market share and stiff competition from Taiwan and South Korean electronics makers.

The Indian government cleared today 25 foreign direct investment proposals worth approximately 3,000 crore rupees or $550 million.

U.S. Home Prices Rise

Home prices in major U.S. metropolitan areas rose in March, according to a report released by Standard & Poor''s today.

The controversial S&P/Case-Shiller 20-City Composite Home Price Index climbed 0.1% on a seasonally adjusted basis in March compared to a 0.2% rise in February.

OECD Inflation Eases

Consumer price inflation in the Organization for Economic Cooperation and Development area fell in April, latest data showed.

Annual inflation dropped to 2.5% in April from 2.7% in March.

In the United States, inflation dropped to 2.3% in April from 2.7% in March.

Marubeni Acquires Gavilon

Marubeni, the Japanese trading company agreed to buy U.S. grain handler Gavilon Group LLC for $3.6 billion.

After the acquisition, Marubeni will control 140 grain loading sites and will have access to a vast grains storage and distribution network in the U.S. as well as sites in key production regions such as Brazil, Australia and Ukraine.

Icahn Acquires Stake in Chesapeake

Hostile investor Carl Icahn acquired a 7.6% stake in natural gas producer Chesapeake Energy Corp. Icahn bought nearly 50.1 million shares of Chesapeake for about $785 million.

Icahn called for an immediate replacement of at least four of the current directors, two directors be designated by him and the other two by a major stakeholder.

Panasonic Plans to Cut Jobs

Panasonic Corp. plans to reduce its current staff of 7,000 at its headquarters in Osaka by 3,000 to 4,000, according to local media reports.

The Japanese electronics company reported a hefty loss for fiscal 2012 due to deteriorated business conditions caused by the Great East Japan Earthquake, flooding in Thailand, European financial crisis and the historically strong yen and strong international competition.

TNK-BP CEO Fridman Resigns

TNK-BP Ltd., the Anglo-Russian oil firm said that Mikhail Fridman resigned from his position as chief executive officer of the company. Fridman also resigned from the position of chairman of the board of TNK-BP Management, a subsidiary of TNK-BP Group that manages the company''s assets in Russia and Ukraine.

TNK-BP, the third largest oil company in Russia, is a 50:50 joint venture company formed by BP and Alfa-Access-Renova, consisting of a group of Russian billionaires.

Earnings Review

Sanderson Farms, Inc. ((SAFM)), the poultry processing company reported second quarter net sales climbed 24% to $595.05 million from $479.34 million in the prior-year quarter. Net profit in the quarter swung to $23.87 million or $1.04 per share compared to a net loss of $16.28 million or 74 cents per share a year ago.

The Bank of Nova Scotia ((BNS)), the diversified financial institution reported second quarter revenue rose 2% to $4.7 billion from 4.63 billion in the year earlier period. Net profit in the quarter fell 10% to $1.46 billion or $1.15 per diluted share compared with $1.62 billion or $1.39 per share in the year-earlier period.