U.S., Euro Bond Markets Active; Citi Raises $2 B

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

U.S. stocks traded higher after corporations take an advantage of low interest rates to issue bonds and securities. Citigroup today launched the sale of $2 billion of securities that yield nearly 8.9%. Novartis and MGM led the bonds offering today and Goldman led the offering in euro bonds.

[R]10:35 AM New York – U.S. stocks traded higher after corporation take an advantage of low interest rates to issue bonds and securities. Citigroup today launched the sale of $2 billion of securities that yield nearly 8.9%. Novartis and MGM led the bonds offering today and Goldman led the offering in euro bonds.[/R]

U.S. stocks traded higher and commodities declined in the early trading. Citigroup gained as much as 3% after launched the sale of $2 billion of securities and wholesale inventories declined.

Novartis AG sold $5 billion of bonds and MGM Mirage placed $845 million in 10-year bonds. In Europe, Goldman completed the sale of 1.25 billion euros on a day when 7 billion euros were raised in the bond market according to the data compiled by Bloomberg.

U.S. inventories declined 0.2% in January after falling at revised 1% in December according to the Commerce Department release today.

January wholesale sales increased 1.3% to $346.7 billion from the revised December sales and up 10.5% from a year ago month. January inventories decreased 0.2% to $382.2 billion from the revised December data and were down 9.7% from a year ago.

The report also noted that wholesalers have inventories to last 1.1 months of sales, lower than 1.2 months of sales in December and the lowest since 1992 when record keeping was launched.

Vehicles inventories declined 0.2% after falling 2.5% in December and inventories of durable goods decreased 0.5% after falling at 1.1% in the previous month.

Citigroup Inc launched the sale of $2 billion of securities that pay 8.875% interest rate. The securities are called TruPS or 30-year fixed-to-floating rate securities and are a part of the requirement to replenish its capital structure.

The bank has raised $80 billion in the last year and its common stock outstanding has surged six times to 30 billion shares according to the filing with the SEC.

Currencies, Commodities and Bonds

Futures of crude oil declined 20 cents to $81.29 a barrel and natural gas decreased 6 cents to $4.46 per mBtu.

The dollar edged higher against the euro to $1.361 and at 90.76 yen.

Yields on 10-year U.S. Treasury bonds traded at 3.73% and 30-year bonds at 4.71%.

Stock Movers

A123 Systems ((AONE)) increased 0.6% after the automotive electric battery maker reported 22 cents a share loss.

American Eagle Outfitters Inc ((AEO)) soared 5% after it guided fiscal first quarter sales between 15 cents and 17 cents a share.

Huntington Bancshares Inc ((HBAN)) gained 4% after it said it plans to increase its 1 cent dividend in the long term.

InterMune Inc ((ITMN)) soared more than 65% after its lung disease drug won an approval from an FDA advisory panel to approve the commercial launch.

Micromet Inc ((MITI)) declined 4% after it plans to sell 10 million shares.

Navistar International ((NAV)) dropped nearly 9% after it reported lower than expected earnings.

Earnings Review

American Eagle Outfitters, Inc ((AEO)), the clothing retailer reported fourth quarter sales rose 7.3% to $972.0 million from $905.7 million a year ago. Net income in the quarter rose 81.3% to $59.3 million or 28 cents per diluted share compared to net income of $32.7 million or 16 cents per share a year ago.

Comparable same-stores sales increased 5%.

ReneSola Ltd ((SOL)), a manufacturer of solar wafers reported fourth quarter revenues rose 13.4% to $179.9 million from $158.6 million a year ago. Net loss in the quarter was $19.9 million or 23 cents per ADS compared to net loss of $128.3 million or $1.86 per ADS a year ago.

Speedway Motorsports, Inc ((TRK)), a promoter and sponsor of motorsports activities reported fourth quarter revenues fell 30.7% to $90.5 million from $130.6 million a year ago. Net loss in the quarter was $15.2 million or 36 cents per diluted share compared to net loss of $4.9 million or 11 cents per share a year ago.

The Children’s Place Retail Stores, Inc ((PLCE)), the specialty retailer of children’s apparel and accessories reported fourth quarter sales rose 5% to $462.8 million from $441.5 million a year ago. Net income in the quarter fell 12% to $34.1 million or $1.23 per diluted share compared to net income of $38.8 million or $1.31 per share a year ago.

Vail Resorts, Inc ((MTN)), the mountain, lodging and real estate company reported second quarter sales fell 22.7% to $300.5 million from $388.8 million a year ago. Net income in the quarter fell 32.7% to $40.7 million or $1.11 per diluted share compared to net income of $60.5 million or $1.65 per share a year ago.