U.S. Stocks Edge Lower; Boeing Lowers Earnings

123jump.com Staff
13 Apr, 2009
New York City

U.S. stocks traded lower after rising for weeks. Ahead of bank earnings this week investors appeared cautious. Genworth plunged 24% after it was denied access to Treasury funds. Express Script agreed to acquire pharmacy benefit business from WellPoint for $4.7 billion. Boeing lowered its earnings.

[R]11:30AM New York – U.S. stocks decline on weak financials ahead of earnings.[/R]

U.S. stocks edged lower in the morning trading on weak financials and cautious outlook from Boeing. The aircraft maker will cut its production of most popular model 777 from seven a month to five a month beginning June 2010.

Of the stocks in S&P 500 index, 104 increased, 389 declined and 7 unchanged after ninety minutes of trading.

Genworth Financial led decliners with a loss of 24% followed by declines in MEMC Electronic Materials of 16%, in General Motors of 12.7%, in Textron Inc of 12% and in Limited Brands of 6.5%.

Genworth did not qualify for the government bailout funds. The company was denied its plan to acquire a lender and convert itself to thrift institution to access funds from the Treasury.

Citigroup Inc led gainers with a rise of 13.5% followed by losses in Monster Worldwide of 11%, in AIG of 10.4%, in CIT Group Inc of 10% and in Bank of America of 8.7%.

Boeing reported that its first quarter 2009 earnings will be lower by 7 cents a share and will take additional 31 cents a share charge to reflect the loss and higher operating cost related to the 747 program. The company left its production schedule for 737 unchanged and said it will update the annual earnings guidance when it releases quarterly earnings on April 22.

Express Script Acquires NextRx

Express Script announced a merger agreement to acquire pharmacy benefit business of WellPoint NextRx for $4.675 billion. The price tag includes future tax benefits of merging two companies and the merger is expected to complete in the second half of 2009.

The company plans to pay in cash and may pay up to $1.4 billion through its share.

Earlier the company had guided annual earnings per share for 2009 between $3.63 and $3.73 and merger may be slightly accretive in this year. The company through the merger will gain 25 million members.

Tech Mahindra Wins Satyam Auction

Satyam Computer Services Ltd ((SAY)) attracted three bids with Tech Mahindra Ltd offered the highest bid. Satyam, the fourth largest software services exporters from India attracted bid of 58 rupees per share from Tech Mahindra, 45.90 a share from Larsen & Toubro and 20 rupees a share from a private equity fund controlled by the U.S. based vulture investor Wilbur Ross.

Satyam at peak traded at 524.90 rupees a share last year and the stock collapsed after its chairman Ramalinga Raju resigned and said that he had inflated cash balance and employee count at the company.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed lower 39.68 or 0.44% to 8,924.43, CSI 300 index in China higher 60.99 or 2.35% closed to 2,656.52.The KL Composite index in Malaysia higher 0.03 or 0.00% closed to 941.41. The Markets of Hong Kong, Australia are close today.

The Kospi Index in South Korea increased 2.22 or 0.17% to close at 1,338.26.The JSE Index in Indonesia increased 74.65 or 5.09% closed to 1,540.40. The Sensex index in India increased 163.36 or 1.51% closed to 10,967.22. The Markets of Thailand are close today.

Europe Markets Review

The Markets of London, Paris, Frankfurt and Zurich are close today.