U.S. Stocks Advance; Manufacturing Slows

123jump.com Staff
01 Mar, 2010
New York City

U.S. stocks advanced after manufacturing expanded for the seventh month in a row. AIG agreed to sell its Asian unit to Prudential Plc for $35.5 billion. Merck KGaA agreed to pay $6 billion beating the offer from Thermo Fisher for Millipore. Copper gained nearly 2%.

[R]12:00 PM New York – U.S. stocks advanced after manufacturing expanded for the seventh month in a row. AIG agreed to sell its Asian unit to Prudential Plc for $35.5 billion. Merck KGaA agreed to pay $6 billion beating the offer from Thermo Fisher for Millipore. Copper gained nearly 2%.[/R]

Stocks gained after manufacturing expanded, AIG sold its Asian unit to Prudential Plc for $35.5 billion and copper prices increased.

Prudential Plc agreed to acquire Asian life insurance unit of American International Group Inc for $35.5 billion.

Prudential will pay $25 billion on cash and $10.5 billion in securities and Prudential stock. Prudential will raise $20 million in a rights offering and $5 billion in bond offering.

Manufacturing activities expanded at a slower pace in February compared to January.

The sector expanded for the seventh month in a row according to the latest data from the Institute for Supply Management. The manufacturing index declined to 56.5 to from 58.4 in January.

The index of new orders declined 6.4% to 59.5 in the month and index of production declined to 58.4 from 66.2 in January.

January construction spending declined 0.6% as annual rate of $884.1 billion from the revised December estimate of $889.6 million and dropped 9.3% from a year ago spending of $974.3 billion.

Copper surged 2% or 1.98 pence to $3.34 and traded as high as $3.48 after Chile was struck with 8.8 magnitude earthquake. Gold decreased $1.60 to $1,117 an ounce and silver increased 1 cent to $16.54.

Crude oil increased 26 cents to $79.92 a barrel.

The euro declined in the early morning trading to $1.347 and the dollar traded at 89.23 yen.

Yields on U.S. Treasuries traded at 3.62% and 30-year bonds at 4.57%.

Stock Movers

American International Group Inc ((AIG)) increased 13.5% after it agreed to sell its Asian insurance unit AIA Group Ltd. to Prudential Plc for $35.5 billion. Prudential plans to raise $20 billion in an offering at 40% discount.

AsiaInfo Holdings Inc ((ASIA)) surged 9% after the company was upgraded by Goldman Sachs Group Inc.

Dish Network Corp ((DISH)) increased 4% after it reported 40 cents a share in adjusted earnings.

Millipore Corp ((MIL)) soared 10% after it agreed to be acquired by Merck KGaA for $6 billion in cash or $107 a share.

RiskMetrics Group Inc ((RISK)) surged 14% to after the company was acquired by MSCI Inc for $21.75 a share or $1.55 billion.

SanDisk Corp ((SNDK)) gained 8% after the company estimated first quarter sales between $925 million and $1 billion.

Earnings Review

DISH Network Corporation ((DISH)), the satellite TV operator reported fourth quarter revenues rose 1.4% to $2.96 billion from $2.92 billion a year ago. Net income in the quarter fell 17.5% to $179 million or 40 cents per diluted share compared to net income of $217 million or 48 cents per share a year ago.

Overseas Shipholding Group, Inc ((OSG)), the bulk shipping company reported fourth quarter revenues fell 38% to $242.6 million from $393.1 million a year ago. Net loss in the quarter was $23.2 million or 86 cents per diluted share compared to net loss of $79.5 million or $2.89 per share a year ago.

Southern Union Company ((SUG)), the distributor of natural gas reported fourth quarter revenues fell 17% to $603.7 million from $727.1 million a year ago. Net income in the quarter fell 58% to $51.0 million or 41 cents per diluted share compared to net income of $120.9 million or 97 cents per share a year ago.