U.S. Indexes Accelerate Declines, AIG to Sue Govt for Bailout

Nichole Harper
08 Jan, 2013
New York City

Broader market indexes declined tracking losses in Europe and Asia. AIG plans to join others and suing government for bailout that saved the insurer. Sears comparable same store sale plunged 13% and said that the chief executive is leaving.

[R]11:25 AM New York – Broader market indexes declined tracking losses in Europe and Asia. AIG plans to join others and suing government for bailout that saved the insurer. Sears comparable same store sale plunged 13% and said that the chief executive is leaving.[/R]

Stocks were on the defensive in early trading in New York ahead of the start of the earnings season.

Broader market indexes declined and tech stocks were in focus as consumer electronics maker gather in Las Vegas.

European markets were also on the decline after unemployment in the euro zone reached to a new high of 11.8% in November.

Nearly 18.8 million people are without work in the currency zone, two million more than a year ago.

Spain registered the highest unemployment with 27% in the European Union and thousands more are likely to lose jobs as banks begin to shed more employees as a part of the EU bailout deal.

Separately, the Economic Sentiment Indicator rose the most in December since July according to the latest survey released in the European Union among businesses and consumers.

The sentiment picked up in the month across all sectors of the euro zone expect in retail sector.

Stocks in Review

American International Group ((AIG)) may join $25 billion lawsuit against the U.S. government. The insurance company was saved by the U.S. taxpayers and now plans to be part of the suit against the government contending that it was charged too high interest rates.

Monsanto Company ((MON)), the agricultural products provider said total net sales in the first quarter ending in November soared 21% to $2.94 billion from $2.44 billion in the same period of last year. Net income in the quarter jumped 169% to $339 million or 63 cents a diluted share compared to $126 million or 23 cents a share a year ago earlier.

The company lifted its full year ongoing earnings per share guidance to between $4.30 and $4.40 per share and for the fiscal year in the range of $4.31 to $4.41 per share.

Team, Inc ((TISI)), the construction service provider said net sales in the second quarter ending in November jumped 11% to $200.7 million from $158.3 million in the same period of last year. Net income in the quarter surged 35% to $13.9 million or 66 cents a diluted share compared to $10.3 million or 50 cents a share a year ago quarter.

The company lifted its previous guidance for fiscal 2013 from 5 cents earnings per share to a revised range of $1.90 to $2.05 per diluted share and now expects revenues between $700 million and $730 million.

RPM International Inc. ((RMP)), the specialty chemical stated net sales in the second quarter ending in November jumped 11% to $1.02 billion from $916.1 million in the same period of last year. Net income in the quarter declined 17% to $41.7 million or 31 cents a diluted share compared to $49.9 million or 38 cents a share a year ago period.

The RPM anticipates full year sales to increase between 8% and 10% and diluted earnings per share to grow 9% to 12% or in the range of $1.80 to $1.85.

Sears Holdings Corporation ((SHLD)), the specialty retailer expects net loss in the fourth quarter ending February 2 between $280 million and $360 million or between $2.64 and $3.40 loss per diluted share.

Total domestic comparable store sales for the nine-week period declined 1.8% and sales at Kmart slipped 2.4%. Sears Domestic and Kmart online sales increased approximately 20%.

For the full year the company expects to report net loss between $721 million and $801 million or between $6.80 and $7.56 loss per diluted share.

The Sears said chief executive officer Louis D''Ambrosio will step down for family health reasons and Edward Lampert will assume the position in addition to chairman of the company.

Yum Brands, Inc. ((YUM)) said fourth quarter sales are likely to decline 6% after its China based KFC restaurants reported food safety issues.