World Markets Look Ahead to G7 Meeting, Spain in Focus

Arthi Gupta
05 Jun, 2012
New York City

U.S. and world markets were hesitant as G7 finance ministers and central bankers hold an emergency meeting to discuss widening financial contagion in the euro zone. Belden agreed to acquire Canada-based Miranda Technologies for C$345 million. Oracle agreed to buy Collective Intellect.

[R]9:45 AM New York – U.S. and world markets were hesitant as G7 finance ministers and central bankers hold an emergency meeting to discuss widening financial contagion in the euro zone. Belden agreed to acquire Canada-based Miranda Technologies for C$345 million. Oracle agreed to buy Collective Intellect.[/R]

U.S. market indexes were nearly flat in the early trading in New York and world markets were hesitant ahead of G7 meeting of finance ministers and central bankers.

The emergency meeting of leaders has raised hopes of some concrete action to forestall the widening financial contagion in the euro zone but earlier meetings of leaders in the last two years have failed to lead to any results.

Spain regained the focus of currency and bond traders after Treasury minister said at the current borrowing rate Spain is effectively shut out of credit markets. The comments briefly spiked yields of Spanish bonds but yields eased to 6.37% in Madrid trading.

Also, comments from German Chancellor and other German officials suggested that Germany remained opposed to European fund to provide more lending to struggling nations. However, German officials are increasingly voicing a possibility of providing direct lending to banks and setting up a euro-wide bank deposit guarantee as early as this summer.

Leaders from the Group of 20 nations are scheduled to meet in Mexico on June 18 and 19 and European leaders are expected to meet at the end of the month to discuss Greece and the widening financial contagion to Spain and Italy.

Euro-zone retail sales fell 1% on a monthly basis in April compared to the 0.3% gain in March.

Separately, German industrial orders declined in April due to a sharp deterioration in foreign demand, according to official data released today but orders in March were revised higher. April orders were still ahead of the average orders in the first quarter.

The Australian central bank announced a 25 basis point reduction in its key official cash rate.

Belden to Acquire Miranda Technologies

Belden Inc., the cable maker agreed to acquire Canada-based Miranda Technologies Inc., a provider of hardware and software solutions for the broadcast infrastructure industry for C$17.00 per share in cash, or an enterprise value of C$345 million.

The offer price represents a 64% premium to Miranda''s closing stock price on the Toronto stock exchange on Monday.

Google Buys Meebo

Google Inc. agreed to buy Meebo Inc., a privately-held social platform to expand its social networking service.

Financial terms of the deal were not disclosed.

Oracle Buys Collective Intellect

Oracle Corporation inked a deal to acquire Collective Intellect, a provider of cloud-based social intelligence solutions. The terms of the agreement were not disclosed.

Earnings Review

Dollar General Corp. ((DG)), the discount retailer said first quarter net sales rose 13% to $3.90 billion from $3.45 billion in the same quarter last year. Same-store sales increased 6.7% in the quarter.

Net income in the quarter surged 36% to $213.4 million or 63 cents per diluted share compared to net income of $157.0 million or 45 cents per share for the year-ago quarter.

United Natural Foods, Inc. ((UNFI)), the specialty foods distributor reported third quarter net sales grew 15.3% to $1.39 billion from $1.20 billion in the same quarter last year. Net income in the quarter climbed 24.3% to $29.03 million or 59 cents per diluted share compared to net income of $23.36 million or 48 cents per share in the prior-year quarter.

Walgreens Company ((WAG)), the drugstore chain said sales in May fell 1.6% to $5.98 billion from $6.08 billion a year ago. Sales in comparable stores decreased 5.8% in the month.

Total sales for the third quarter declined 3.3% to $17.77 billion from $18.37 billion in the third quarter of fiscal 2011. Comparable store sales for the third quarter decreased 6.5%.