U.S. Jobless Claims Fall; Exxon, Denbury Ink $1.6 B Deal

Arthi Gupta
20 Sep, 2012
New York City

U.S. indexes fell after weekly jobless claims slid and manufacturing index was flat in September. Exxon agreed to acquire Denbury

[R]10:15 AM New York – U.S. indexes fell after weekly jobless claims slid and manufacturing index was flat in September. Exxon agreed to acquire Denbury’s Bakken shale assets for $1.6 billion. Avolon finalized $2.4 billion order with Boeing.[/R]

U.S. indexes lost ground in the first hour of trading after weekly jobless claims declined and the euro zone recession deepens. Moreover, Japan’s exports to China fall and a private survey in China showed shrinking growth rate in manufacturing for the eleventh month in a row.

In domestic economic data, weekly jobless claims dropped 3,000 to 382,000 and there was a modest improvement in manufacturing business conditions in September.

European indexes were under pressure after the euro zone private sector contracted for the 12th time in 13 months and Spain managed to sell bonds more than targeted at lower yields.

Separately, a private survey in China indicated manufacturing activities stabilizing but still shrinking in September.

The purchasing managers'' index rose to 47.8 in September from 47.6 in August, according to flash results of a survey by Markit Economics and HSBC today. The manufacturing output index dropped to a 10-month low of 47 in September from 48.2 in August.

Japan’s merchandise trade deficit was 754.127 billion yen in August, following the downwardly revised deficit of 518.9 billion yen in July, the Ministry of Finance said today.

Exports fell 5.8% from a year earlier to 5.045 trillion yen, marking the third straight month of contraction.

U.S. Weekly Jobless Claims Drop

Seasonally adjusted weekly jobless claims decreased 3,000 to 382,000 from the revised previous week claims of 385,000, according to data released by the U.S. Labor Department today.

The 4-week moving average was 377,750, an increase of 2,000 from the previous week''s revised average of 375,750.

U.S. Manufacturing Flat

The Markit Flash U.S. Manufacturing Purchasing Managers’ Index was unchanged at 51.5 in September, indicating only a modest improvement in U.S. manufacturing business conditions.

Manufacturers reported a rise in output during September, though growth was only marginal and the weakest for three years.

Exxon Inks Deal with Denbury

Exxon Mobil Corporation agreed to acquire 100% of Denbury’s Bakken shale assets. This agreement will significantly increase Exxon’s production acreage in the prolific Bakken oil shale region in North Dakota and Montana.

In exchange for its Bakken shale assets, Denbury will receive $1.6 billion in cash and acquire ExxonMobil’s interests in the Hartzog Draw field in Wyoming and Webster field in Texas,

Avolon Finalizes Deal with Boeing

Avolon, the international airplane leasing company finalized a firm order with Boeing for ten 737 MAX 8s, five 737 MAX 9s and ten next generation 737-800s. The order has list-price value of $2.4 billion.

Earnings Review

Adobe Systems Incorporated ((ADBE)), the publishing and design software maker said third total revenue rose 7% to $1.08 billion from the same quarter last year. Net income for the quarter climbed to $201.4 million or 40 cents per diluted share compared to $195.1 million or 39 cents per share for the year-ago quarter.

Bed Bath & Beyond Inc. ((BBBY)), the home furnishing retailer reported second quarter sales rose 12.1% to $2.59 billion compared to last year. Comparable store sales increased 3.5% compared with an increase of 5.6% last year.

Net income in the quarter fell to $224.3 million, from $229.4 million last year. Earnings per share improved to 98 cents from 93 cents to reflect a lower share count.

Clarcor Inc. ((CLC)), the filtration products maker reported third quarter net sales grew 1% to $286.7 million. Net income for the quarter dropped 6% to $30.3 million or 60 cents a diluted share from $32.1 million or 63 cents a share last year.

ConAgra Foods, Inc. ((CAG)), the food company reported first quarter net sales climbed 6.7% to $3.31 billion. Net income surged 166.6% to $250.1 million or 61 cents a diluted share from $93.8 million or 22 cents a share last year.

Herman Miller, Inc. ((MLHR)), the office furniture maker reported first quarter net sales decreased 1.8% to $449.7 million from last year. Net profit for the quarter dropped 18.7% to $20 million or 34 cents per diluted share from $24.6 million or 42 cents per share last year.