Archive for August, 2011

Stock futures signal mixed open; techs eyed

Thursday, August 25th, 2011 | Finance News

NEW YORK (Reuters) – Stock futures pointed to a mixed open on Wall Street on Thursday, with futures for both the S&P 500 and the Dow Jones rising 0.3 percent and Nasdaq 100 futures down 0.3 percent on news Steve Jobs had stepped down as Apple CEO.

Technology shares will be in focus after Jobs resigned and passed the reins to his right-hand man Tim Cook, saying he could no longer fulfill the duties.

Apple shares fell 7 percent in after-hours trade on Wednesday, while its stocks traded in Frankfurt were down 4.8 percent. Apple has the biggest effect on the Nasdaq 100's daily moves, as it accounted for more than 14 percent of the index at the end of trading on Wednesday, according to Reuters data.

The Labor Department releases first-time claims for jobless benefits for the week ended August 20 at 8:30 a.m. EDT. Economists in a Reuters survey forecast a total of 405,000 new filings compared with 408,000 in the prior week.

AT&T said on Wednesday the Federal Communications Commission had requested more information about its acquisition of T-Mobile in relation to its commitment to expand high-speed wireless services to 97 percent of all Americans.

The Obama administration is working on proposals to prop up the weak U.S. housing market and may back a plan to refinance government-backed mortgages at today's lower interest rates, the New York Times reported, citing two people briefed on the discussions.

Companies reporting results include Hormel Foods and Big Lots.

European shares rose 1 percent on Thursday, extending a rally into a fourth day as speculation grew that U.S. Federal Reserve chairman Ben Bernanke would announce stimulus measures for the struggling U.S. economy on Friday. Japan's Nikkei average rose 1.5 percent.

Bernanke was due to address central bankers at an annual symposium in Jackson Hole, Wyoming, on Friday. His speech last year laid the groundwork for the Fed's unprecedented $600 billion bond-buying program, known as quantitative easing or QE2, to revive a sputtering U.S. economy.

U.S. stocks rallied for a second day on Wednesday. The Dow Jones industrial average shot up 143.95 points, or 1.29 percent, to end at 11,320.71. The Standard & Poor's 500 Index jumped 15.25 points, or 1.31 percent, to finish at 1,177.60. The Nasdaq Composite Index gained 21.63 points, or 0.88 percent, to close at 2,467.69.

(Reporting by Atul Prakash; Editing by Dan Lalor)

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Buffett’s Berkshire wins EU okay for Lubrizol buy

Thursday, August 25th, 2011 | Finance News

BRUSSELS (Reuters) – Billionaire Warren Buffett's Berkshire Hathaway (BRKa.N) gained EU approval on Thursday for its $9 billion purchase of Lubrizol Corp (LZ.N).

The Lubrizol deal suggests Berkshire is looking to boost its operations outside North America, in contrast to many of its recent acquisitions, which have focused on an expected economic revival in the United States.

The European Commission, the EU competition watchdog, said its investigation of the deal had not revealed any major concerns.

"The transaction would not raise competition concerns, because of the parties' moderate market shares and the presence of a number of credible competitors in the markets concerned," the Commission said in a statement.

Lubrizol, which makes lubricants for engines, especially large trucks, buses and boats, has seen growing demand for its products as shipping of goods increases around the world.

About 72 percent of the company's revenue came from its petroleum additives business last year, and about 65 percent of sales were from outside North America.

(Reporting by Charlie Dunmore, Editing by Rex Merrifield)

(This story was corrected to change the spelling of Buffett)

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Diageo full-year profit up 17 pct as margins rise

Thursday, August 25th, 2011 | Finance News

LONDON – Diageo PLC, the world's largest maker of spirits, on Thursday reported a 17 percent rise in full-year profit, boosted by increased sales of higher-priced brands and a reduced tax bill.

For the year ending June 30, the maker of Johnnie Walker whisky and Guinness stout reported a profit of 1.9 billion pounds ($3.1 billion), up from 1.63 billion pounds a year earlier.

Sales rose 2 percent to 9.94 billion pounds. The tax rate fell from 21 percent to 14.5 percent.

The company raised its full-year dividend by 6 percent to 40.4 pence.

Diageo shares were up 4.9 percent at 1,173 pence as trading opened on the London Stock Exchange.

Chief Executive Paul Walsh forecast sales growth of 6 percent in the medium term.

"Medium-term guidance looks to be setting targets that are tough but achievable and also make Diageo look attractive as an investment proposition if achieved," said Phil Carroll, analyst at Shore Capital.

Diageo reported improved margins driven by a 24 percent increase in sales of premium "reserve brands" including Johnnie Walker, Kenel One vodka and Tanqueray No. 10 gin, and a 16 percent increase in sales of scotch in emerging markets.

Sales rose 3 percent in North America, 9 percent in Asia Pacific and 13 percent in other international markets. Sales in Europe dropped 3 percent, dragged down by lower sales in Greece, where sales dropped by a third, and an 18 percent decline in Spain and Portugal.

Diageo did not break out results for the second half of the year.

"We have strengthened the business, investing more behind our brands and in our routes to market and we have deepened our leading brand and market positions in the fastest growing markets of the world," Walsh said. "In addition we have implemented changes to drive further operational efficiencies."

Diageo reported spending 111 million pounds on a restructuring program announced in May, including 77 million pounds in payments to employees who were laid off.

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