Euro Zone Worries Drag Indexes in New York, UPS Cuts Outlook

Arthi Gupta
24 Jul, 2012
New York City

U.S. indexes edged lower as global markets remained focused on the euro zone debt pressures. Cisco planned to slash 1,300 jobs. Whirlpool swung to quarterly profit and EMC Corp second quarter net rose 19%. After the close, Apple is scheduled to release earnings.

[R]9:35 AM New York – U.S. indexes edged lower as global markets remained focused on the euro zone debt pressures. Cisco planned to slash 1,300 jobs. Whirlpool swung to quarterly profit and EMC Corp second quarter net rose 19%. After the close, Apple is scheduled to release earnings.[/R]

Stocks on Wall Street were under pressure in early trading after debt pressures intensified in the euro zone, talks of Greek exit resurfaced but a private survey on Chinese manufacturing showed an increase in July.

European markets traded sideways as debt pressures intensified in the region and bond yields of Spain and Italy rose near record levels for the second day this week.

Late Monday, Moody''s Investors Service downgraded its rating outlook on Germany, the Netherlands and Luxembourg to “negative” from “stable.” The debt rating agency cited rising cost of additional bailouts and the possible exit of Greece from the currency union.

The international lenders meet today to assess Greece’s progress in meeting its deficit target and many private estimates suggest the nation is not likely to meet the financial targets set by three international lenders.

The Hungarian central bank held its policy interest rate unchanged at 7% for the seventh time in a row.

Asian markets traded mixed and Chinese manufacturing sector contraction slowed in July.

The Flash China Manufacturing PMI rose to 49.5 in July from 48.2 in June, a five-month high, according to Markit Economics. The flash manufacturing output index rose to a nine-month high of 51.2 in July from 49.3 in June.

Cisco to Slash 1,300 Jobs

Cisco Systems, Inc., the computer networking gear maker said that it will cut about 1,300 jobs or about 2% of its global workforce to reduce costs.

Peet''s Coffee Agrees to $1 Billion Deal

Joh. A. Benckiser agreed to acquire Peet''s Coffee & Tea, Inc., the specialty coffee and tea retailer and roaster for $73.50 per share in cash or a total of approximately $1 billion.

The agreement represents a premium of approximately 29% over Peet''s closing stock price on July 20.

Earnings Review

EMC Corporation ((EMC)), the data storage solutions provider said second quarter consolidated revenue rose 10% to $5.31 billion compared with the year ago quarter. Net income in the quarter rose 19% to $650 million or 29 cents per diluted share, from $546.49 million or 24 cents per share last year.

Illinois Tool Works Inc. ((ITW)), the industrial products and equipment maker said second quarter total revenues rose 0.9% to $4.655 billion. Net income in the quarter advanced 76.6% to $881 million or $1.85 per diluted share from $499 million or 99 cents per share last year.

United Parcel Service, Inc. ((UPS)), the package delivery company reported second quarter total revenues rose 1.2% to $13.35 billion from $13.19 billion in the prior year quarter. Net income for the quarter climbed 2.2% to $1.116 billion or $1.15 per diluted share from $1.092 billion or $1.09 per share in the same quarter last year.

The parcel delivery company lowered its full year earnings outlook to between $4.50 and $4.70 a share from the previous estimate of between $4.75 and $5 a share.

Whirlpool Corp. ((WHR)) the home appliances manufacturer reported second quarter sales dropped 4.6% to $4.51 billion. Net earnings in the quarter swung to $113 million or $1.43 per diluted share compared to a net loss of $161 million or $2.10 per share in the prior year period.

Wipro Limited ((WIT)), the Indian software services provider reported first quarter revenues grew 24% to 106.53 billion rupees or $2 billion the same quarter last year. Net income for the quarter rose 18% to 15.80 billion rupees or 6.43 rupees per share from 13.35 billion rupees or 5.44 rupees per share last year.