U.S. Indexes Advance, Chrysler June Sales Up 20%

Arthi Gupta
03 Jul, 2012
New York City

U.S. indexes traded higher on the hopes of a central bank action. One Equity Partners agreed to acquire M*Modal for about $1.1 billion. Rexam proposed to sell its personal care business for $709 million. Chrysler reported a 20% increase in total U.S. sales for June.

[R]10:10 AM New York – U.S. indexes traded higher on central bank action. One Equity Partners agreed to acquire M*Modal for about $1.1 billion. Rexam proposed to sell its personal care business for $709 million. Chrysler reported a 20% increase in total U.S. sales for June.[/R]

World markets traded on hopes and optimism after weak manufacturing data from the U.S., Europe and China.

Investors shifted attention to monetary stimulus from central banks in Europe and China and hoped that new steps will push the global economy in the higher gear.

Stocks in New York gained in early trading as markets are scheduled to close at 1 p.m. ET ahead of Independence Day holiday on Wednesday.

Investors around the world digested the weak manufacturing from China and the U.S. and Europe and record high unemployment in the euro zone. Also, crude oil jumped after production in Norway fell and Iran and U.S. take steps to build military in the Persian Gulf.

Robert E. Diamond Jr, the chief executive of Barclays resigned after politicians stepped up heat and welcomed his resignation. The pressure on Diamond intensified after Labor Party chief demanded an independent investigation in the company.

Ed Miliband, leader of the opposition Labour Party said that Diamond’s decision to resign was “necessary and right” and added “this is about the culture and practices of the entire banking system” which is why “we need an independent, open, judge-led public inquiry.”

Diamond resigned a day before he is scheduled to testify before the Treasury Select committee, responsible for probing London interbank offered rate or Libor setting.

Robert E. Diamond Jr, the chief executive of Barclays resigned after politicians stepped up heat and welcomed his resignation. The pressure on Diamond intensified after Labor Party chief demanded an independent investigation in the company.

Australia''s central bank decided to keep the key interest rate unchanged.

The Reserve Bank of Australia held the benchmark cash rate steady at 3.5% following a 50 basis point reduction in May and a quarter-point cut in June.

OECD Area Inflation Eases

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

The consumer price index increased 2.1% on an annual basis in May following a 2.5% growth in April.

Inflation in the United States eased to 1.7% in May from 2.3% in April, mainly reflecting a fall in energy prices.

One Equity Partners to Acquire M*Modal

M*Modal Inc. agreed to be acquired by One Equity Partners for $14 per share or about $1.1 billion in an all-cash deal.

The offer price represents an 8.3% premium over M*Modal''s closing stock price of $12.93 on July 2.

BlackRock to Buy Swiss Re Private Equity Partners

BlackRock, Inc. agreed to acquire Swiss Re Private Equity Partners AG, the European private equity and infrastructure fund-of-funds franchise of Swiss Re.

The transaction is expected to be completed by the end of the third quarter. Terms of the all-cash transaction were not disclosed and the deal is expected to be “neutral-to-modestly accretive to 2012 earnings.”

Microsoft Incurs Goodwill Charges

Microsoft Corp. said it will take a non-cash goodwill charge of about $6.2 billion in the fourth quarter, mainly from the acquisition of aQuantive Inc.

Microsoft completed its acquisition of aQuantive on Aug. 13, 2007, in an all-cash transaction valued at just over $6.3 billion. While the aQuantive acquisition continues to provide tools for Microsoft’s online advertising efforts, the acquisition did not accelerate growth to the degree anticipated, contributing to the write-down.

Rexam Sells Personal Care Business

Rexam PLC, the consumer packaging company announced the proposed sale of its personal care business in two parts deal for $709 million in cash or £452 million at current exchange rates.

The cosmetics, toiletries and household care products business is sold to an affiliate of Sun Capital Partners Inc, a private equity firm for $459 million in cash and a subsidiary of Silgan Holdings Inc, a U.S. based supplier of packaging for consumer goods products agreed to acquire the High Barrier Food packaging business for $250 million in cash.

Chrysler Auto Sales

Chrysler Group LLC, the automaker reported a 20% increase in total U.S. sales for June, reflecting sales growth across its brands. The month also recorded the best June sales since 2007.

The company reported total U.S. sales rose 20% to 144,811 units in June.