U.S. Producer Prices Rise; JPMorgan, Wells Fargo Earnings Up

Arthi Gupta
12 Oct, 2012
New York City

U.S. indexes rose after JPMorgan and Wells Fargo reported upbeat earnings. U.S producer prices rose in September. Ecolab agreed to acquire Champion Technologies for $2.2 billion. Ares Management to acquire majority stake in Smart & Final for $975 million.

[R]9:10 AM New York – U.S. indexes rose after JPMorgan and Wells Fargo reported upbeat earnings. U.S producer prices rose in September. Ecolab agreed to acquire Champion Technologies for $2.2 billion. Ares Management to acquire majority stake in Smart & Final for $975 million.[/R]

U.S. indexes advanced after financial companies JPMorgan and Wells Fargo reported upbeat earnings. Producer prices in the U.S. rose more than estimated in September.

Markets across Europe fell as the prospect of Spanish bailout rose and politicians in the region ramp up talks as France, Italy and Spain look for ways to ease bailout conditions for Spain and Italy, and Germany works with Netherlands and Austria to look for tighter implementation of austerity measures.

Asian indexes traded lower tracking the weakness in European indexes and on Wall Street.

U.S. Producer Prices Rise

The seasonally adjusted U.S. producer price index rose 1.1% in September compared to the 1.7% rise in August, according to a report released by the U.S. Labor Department today.

The producer price index for intermediate materials, supplies, and components moved up 1.5% in September, the largest advance since a 1.7% jump in February 2011.

Ecolab to Acquire Champion Technologies

Ecolab Inc. agreed to acquire privately held Champion Technologies and its related company Corsicana Technologies in a transaction valued at approximately $2.2 billion.

Ecolab plans to pay for the deal with 75% cash and 25% stock.

Ecolab will pay approximately $1.7 billion in cash and issue approximately 8 million shares of Ecolab common stock and the transaction is expected to close by year-end.

Ares Management to Buy Smart & Final

Ares Management agreed to acquire a majority stake in Smart & Final Holdings Corp. from Apollo Global Management LLC. The total enterprise value for the transaction is $975 million.

Earnings Review

iGATE Corporation ((IGTE)), the information technology company reported third quarter revenues increased 2% to $271.1 million from the third quarter of 2011. Net income for the quarter increased 97.9% to $28.3 million from $14.3 million in the third quarter of 2011.

Infosys Ltd., the India-based outsourcing services provider reported second quarter revenue rose 22% to 98.58 billion rupees. Net profit in the quarter increased 24% to 23.7 billion rupee from 19.1 billion rupee last year.

JPMorgan Chase & Co. ((JPM)), the financial services provider said third quarter revenues advanced 6% annually to $25.15 billion. Net income for the quarter surged 34% to $5.7 billion or $1.40 per diluted share compared with net income of $4.3 billion or $1.02 per share in the third quarter of 2011.

Wells Fargo & Company ((WFC)), the mortgage lender reported third quarter revenue was $21.2 billion, up 8% from the same period of last year. Net income rose 22% to $4.9 billion or 88 cents per diluted common share compared to net income of $4.1 billion or 72 cents per share, for third quarter 2011.

Net interest income for the quarter rose to $10.66 billion from $10.54 billion in the year-ago quarter.