U.S. Home Prices Improve, Hudson City and M&T Bank in a Deal

Arthi Gupta
28 Aug, 2012
New York City

U.S. indexes edged lower after metropolitan home price index improved in June. A lowered growth forecast from Japan and the European debt crisis marred investor sentiment. Hudson City Bancorp agreed to merge with M&T Bank in $3.7 billion deal.

[R]10:20 AM New York – U.S. indexes edged lower after metropolitan home price index improved in June. A lowered growth forecast from Japan and the European debt crisis marred investor sentiment. Hudson City Bancorp agreed to merge with M&T Bank in $3.7 billion deal.[/R]

U.S. indexes traded lower in early morning trading after home prices unexpectedly improved in June signalling economic recovery.

Markets in Europe focused on world markets and the latest economic downward assessment from Japan knocked the sentiment lower.

European Central Bank President Mario Draghi will not be attending the world meeting of central bankers later in the week in the U.S. fueling a speculation that the bank is working on finalizing the details to support sovereign bonds market.

Spanish and Italian borrowing costs fell in bond auctions today. German consumer confidence set to remain stable in September.

Asian markets ended lower after the Japan slashed its economic forecast on weaker than anticipated exports and said that the economy is facing a slow decline in prices.

U.S. Home Prices Improve

Home prices in major U.S. metropolitan areas unexpectedly improved in June, according to a controversial index tracked by Standard & Poor''s today.

The report showed that the S&P/Case-Shiller 20-City Composite Home Price Index rose 0.5% in June compared to the same month a year ago.

The Home Price Index increased by a seasonally adjusted 0.9% on a monthly basis in June compared to a 1% rise in May.

Hudson City Bancorp to Merge with M&T Bank

Hudson City Bancorp, Inc. agreed to merge into a subsidiary of M&T Bank Corporation, expanding the community bank’s franchise in the eastern United States. The transaction is valued at approximately $3.7 billion.

The combined company will operate a network of 870 branches that will stretch from Connecticut to Virginia.

IBM to Acquire Kenexa

International Business Machines Corp. agreed to acquire human resource services provider Kenexa for $46 a share in cash or at a net price of approximately $1.3 billion.

Earnings Review

Bank of Montreal ((BMO)), the financial services provider report third quarter total revenues rose to C$3.88 billion from C$3.32 billion in the same quarter last year. Net income in the quarter rose to $970 million or $1.42 per share from $708 million, or $1.09 per share, a year earlier.

PVH Corp. ((PVH)), the apparel maker said second quarter total revenue rose to $1.34 billion from $1.33 billion in the same quarter last year. Net income for the quarter rose to $87.7 million or $1.19 per share from $66.7 million or 92 cents per share, in the comparable period last year.

Sanderson Farms, Inc. ((SAFM)), the poultry processor reported third quarter net sales rose to $624.9 million compared with $511.2 million for the same period a year ago. Net income generated in the quarter was $28.7 million or $1.25 per diluted share compared with a net loss of $55.7 million or $2.51 per share, for the third quarter of fiscal 2011.