U.S. Weekly Claims Rise, FirstMerit to Acquire Citizens Republic

Arthi Gupta
13 Sep, 2012
New York City

U.S. indexes slid after weekly jobless claims rose more than estimated. U.S. producer prices and foreclosure filings climbed in August. FirstMerit agreed to acquire Citizens Republic Bancorp for $912 million.

[R]9:35 AM New York – U.S. indexes slid after weekly jobless claims rose more than estimated. U.S. producer prices and foreclosure filings climbed in August. FirstMerit agreed to acquire Citizens Republic Bancorp for $912 million.[/R]

U.S. indexes hugged flat lines at the opening and ahead of the Fed announcement later today after the conclusion of 2-day meeting. Separately, weekly jobless data and producer price index increased more than expected.

The rate setting committee’s meeting acquired added significance on the rising expectations for the third round of stimulus.

European indexes traded mixed. Economic data from the region did not lift investor sentiment after German growth outlook was lowered for this year and next and Greek jobless rate rose in the second quarter.

The Swiss National Bank left the minimum exchange rate unchanged at Sfr1.20 per euro, as expected.

Asian markets closed lower on speculation about the Fed decision. Investors anticipate a third round of quantitative easing from the Fed on weak global economic data.

U.S. Weekly Jobless Claims Rise

Seasonally adjusted weekly jobless claims increased 15,000 to 382,000 in the week ending September 8, from the previous week''s revised claim of 367,000, according to a report released by the U.S. Labor Department today.

The 4-week moving average was 375,000, an increase of 3,250 from the previous week''s revised average of 371,750.

U.S. Producer Prices Climb

U.S. producer prices rose more than estimated in August, according to a report released by the U.S. Labor Department today.

The seasonally adjusted U.S. producer price index rose 1.7% in August following a 0.3% rise in July.

The Producer Price Index for intermediate materials, supplies, and components rose 1.1% in August following four consecutive declines. Most of this increase can be attributed to higher prices for intermediate energy goods, which climbed 4.4%

U.S. Foreclosure Filings Rise

U.S. foreclosure filings rose 1% to 193,508 properties in August from July but declined 15% from August 2011, according to RealtyTrac. The company said one in every 681 U.S. housing units had a foreclosure filing during the month.

Illinois posted the nation’s highest foreclosure rate, one in every 298 housing units with a foreclosure filing.

Foreclosure starts which include default notices or scheduled foreclosure auctions, depending on the state were filed for the first time on 99,405 U.S. properties in August, a 1% increase from July but down 13% from August 2011.

FirstMerit Acquires Citizens Republic Bancorp

FirstMerit Corporation agreed to acquire Citizens Republic Bancorp, Inc. in a stock-for-stock transaction with a total value of approximately $912 million based on FirstMerit''s average ten-day closing stock price ended September 12.

Under the terms of the agreement, Citizens'' shareholders will receive a fixed 1.37 shares of FirstMerit common stock in exchange for each share of Citizens'' common stock.

The transaction creates a unique, contiguous Midwest banking franchise, expanding FirstMerit''s footprint into Michigan and Wisconsin, as well as strengthening its presence in Northeast Ohio.

Earnings Review

Pall Corporation ((PLL)), the filtration products maker said fourth quarter sales increased 0.4% to $783.7 million from a year ago. Net income for the quarter fell 11.5% to $86.2 million or 73 cents per diluted share compared to $97.4 million or 82 cents per share for the year-ago quarter.

Pier 1 Imports, Inc. ((PIR)), the home furnishings retailer reported second quarter net sales increased 8.3% to $367.6 million, from $339.55 million a year earlier. Comparable store sales increased 6.7% during the second quarter compared to 10.8% advance last year.

Net income in the quarter rose to $26.2 million or 24 cents per diluted share, from $16.64 million or 14 cents per share last year.

PriceSmart, Inc. ((PSMT)), the membership shopping warehouse clubs operator reported net sales for August increased 12.3% to $166.7 million, from the same month a year ago.

For the five-week period ended September 2, comparable warehouse sales for the 28 warehouse clubs open at least 13 1/2 full months increased 10% compared to the same five-week period last year.

W.W. Grainger, Inc. ((GWW)), the industrial distributor said sales grew 10% in August compared to August 2011. Results for the month included a 4 percentage point contribution from acquisitions and a 1 percentage point decline from foreign exchange.