U.S. Durable Orders Rise, Jobless Claims Fall; Exxon Net Soars 49%

Arthi Gupta
26 Jul, 2012
New York City

U.S. indexes advanced after durable goods orders increased in June and weekly jobless claims fell more than anticipated. United Technologies agreed to sell industrial products businesses for $3.46 billion. Exxon quarterly net soared 49%.

[R]9:35 AM New York – U.S. indexes advanced after durable goods orders increased in June and weekly jobless claims fell more than anticipated. United Technologies agreed to sell industrial products businesses for $3.46 billion. Exxon quarterly net soared 49%.[/R]

U.S. indexes advanced after durable goods orders rose 1.6% in June and weekly jobless claims fell more than anticipated.

In earnings, Exxon net soars, Colgate-Palmolive quarterly net improved marginally but Dow Chemical sales decline was led by a weakness in Europe.

European indexes gained after positive comments from the ECB governor Mario Draghi confirming the central bank’s commitment to preserve the euro and the currency union.

Kenichi Watanabe, chief executive officer and Takumi Shibata, chief operating officer of Nomura resigned on the recent disclosures that employees participated in insider trading scandals at the largest securities firm in Japan.

The company recently confirmed that its employees had leaked information on at least three public offerings in 2010 to fund managers who profited from subsequent short selling of these stocks.

U.S. Durable Goods Orders Rise

U.S. durable goods orders increased in June, according to the U.S. Commerce Department report.

New orders for manufactured durable goods increased $3.4 billion or 1.6% to $221.6 billion in June. Excluding transportation orders, however, the durable goods orders fell 1.1% for June.

Shipments of manufactured durable goods in June increased $0.2 billion or 0.1% to $225.4 billion.

U.S. Weekly Jobless Claims Drop

First-time claims for U.S. unemployment benefits fell more than expected in the week ended July 21, according to a report released by the U.S. Labor Department today.

Seasonally adjusted initial claims were 353,000, a decrease of 35,000 from the previous week''s revised figure of 388,000.

The 4-week moving average fell to 367,250, a decrease of 8,750 from the previous week''s revised average of 376,000.

The advance seasonally adjusted insured unemployment rate was 2.6% for the week ending July 14, unchanged from the prior week''s unrevised rate.

United Technologies to Sell Industrial Businesses

United Technologies Corp. agreed to sell its Milton Roy Co., Sullair Corp. and Sundyne Corp. industrial products businesses to BC Partners and The Carlyle Group for $3.46 billion. The transaction is expected to close by the year-end.

Proceeds from the sale will be used to repay a portion of the short-term debt incurred to finance the proposed acquisition of Goodrich Corporation.

Earnings Review

Colgate-Palmolive Company ((CL)), the consumer products maker said second quarter worldwide net sales rose 2% to $4.27 billion. Net income improved 0.8% to $627 million or $1.30 per diluted share, from $622 million or $1.26 per share in the 2011 period.

Exxon Mobil Corporation ((XOM)), oil and natural explorer and retailer said second quarter total revenues climbed 1.5% to $127.36 billion, higher than $125.49 billion in the prior-year quarter. Net income surged 49% to $15.91 billion or $3.41 per share from $10.68 billion or $2.18 per share a year ago.

The Dow Chemical Company ((DOW)), the diversified products manufacturer reported second quarter net sales declined 10% to $14.51 billion. Net income fell 34% to $649 million or 55 cents per diluted share from $982 million or 84 cents per share in the same quarter last year.

The Hershey Company ((HSY)), the chocolate producer reported second quarter consolidated net sales rose 6.7% to $1.41 billion. Net income climbed 4.4% to $135.69 million or 59 cents per diluted share compared to $130.02 million or 56 cents per share a year ago.

Volkswagen AG ((VOW)), the German automobile manufacturer said second quarter sales revenues increased 19.2% to €48.05 billion. Net profit increased 20% to €5.61 billion or €12.05 per share from €4.67 billion or €10.04 per share a year ago.

Watson Pharmaceuticals Inc. ((WPI)) said second quarter net revenues rose 25% to $1.36 billion. Net loss in the quarter swung to $62.2 million or 49 cents per diluted share compared to a profit of $52.7 million or 42 cents per share in the prior-year quarter.