DJIA Weekly Review: Back-to-School Forecast Warms Up, GE and Chevron Craft Deal
The Dow Jones Industrial Average finished the past 5 trading days (July 16-July 20) up .36% to round out the week at 12,822.57. Here’s your Cheat Sheet to the most important Dow stock moving news in the past week:
American Express Company (NYSE:AXP): Since the World Trade Organization ruled that the government of China illegally favors its state-owned network, American bank cards still face an entrenched opponent, says a Reuters report. China’s credit card company China UnionPay has 2.5 billion cards in circulation worldwide.
Bank of America Corporation (NYSE:BAC) will pay $375 million to resolve a suit with Syncora Guarantee, the bond insurer division of Syncora Holdings, concerning toxic mortgage-backed securities, according to Reuters. The former was sued in 2009 by Syncora in order to recover losses on securities transactions which were based upon home loans made by Countrywide.
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Caterpillar Inc. (NYSE:CAT): China’s Premier Wen Jiabao has commented that the labor situation in his country will become more severe, reports Bloomberg Businessweek.
Chevron Corporation (NYSE:CVX) should be allowed to resume production in a field offshore of Rio de Janeiro State which the company shut down after detecting oil seepage, subsequent to a spill last November, says Reuters. Regulators in that country have signed off on the resumption of production, but the exact date is not clear.
Wal-Mart Stores Inc. (NYSE:WMT): Average back-to-school spending this year has been forecast to jump by 14 percent, which would mark the most rapid rate since at least 2003, reports a survey that was conducted for the National Retail Federation. More children will enter grades K to 12 this September in contrast to 2011’s numbers, which resulted in a flat spending period and thus creates a need for extra replenishment of school items this year, says the Wall Street Journal.
Walt Disney Company’s (NYSE:DIS) Disney Channel is among several networks that have seen their ratings jump during the blackout of Viacom’s (NYSE:VIA) Nickelodeon on DirecTV (NASDAQ:DTV). Time Warner’s (NYSE:TWX) Cartoon Network, Comcast Corporation’s (NASDAQ:CMCSA) Sprout and the Hub, which is owned by Discovery Communications (NASDAQ:DISCA), and Hasbro (NYSE:HAS) are others in the lucky group, according to The New York Times.
General Electric Co. (NYSE:GE): Some analysts believe that economic growth in China should step up its pace, reaching 7.9 percent in the third quarter and to 8.2 perecnt in the fourth quarter, says a Reuters report. However, full-year 2012 growth is predicted to slow from 9.2 percent seen in 2011 to 8 percent.
Hewlett-Packard Company (NYSE:HPQ): Hewlett-Packard GmbH reports that MLP Finanzdienstleistungen AG, which is an independent financial services and wealth management consulting firm in Germany, has reached an agreement for H-P to continue the management of MLP’s information tech and applications environments. Through the terms, which extends the firms’ relationship for 10 years, HP will begin supplying utility-based business process outsourcing services to fuel efficiencies and innovations for MLP. This provides MLP flexibility to quickly scale information technology services up or down to address changing business requirements.
Intel Corporation (NASDAQ:INTC): Worldwide manufacturers are exploring possibilities in Malaysia’s Penang Island and elsewhere, as they enlarge operations and expand their supply chains, subsequent to Japan’s earthquake of 2011, and floods in Thailand, according to the Wall Street Journal.
American Express Company (NYSE:AXP) / Avoya Travel report that the first two quarters of the current year were its highest performing quarters in the company’s history. These outstanding quarters are subsequent to the firm’s top year of 2011, and exhibit the growth of the Avoya Network of Independent Agencies. The 2012 results are based on all measures of success, among which include the enhancement of Avoya’s extraordinary vacation experience for its clients, expansion of the company’s new and repeat clients, and raising overall sales performance. This new growth follows Avoya’s impressive 2011, which posted an all-time high for revenue, with sales is excess of $200 million, along with increased average commission earnings for its Independent Agency Network.
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Boeing Co. (NYSE:BA), in a conference call, explains that the process is not technically closed to anyone, but the spokesperson added that the Superior bid number “that is out there is pretty high” and that Textron will monitor the process to see how it plays out. In addition, the company says that Textron would be interested in Hawker defense assets only “at a value that we felt was appropriate.”
Bank of America Corporation (NYSE:BAC): The average investor fled to the bond market in the past 12 months, says a survey conducted by Fidelity Investments, but at the same time, millionaires added domestic stocks more than any other asset. Next came cash, followed by exchange-traded funds, and finally, individual United States bonds or domestic stock funds, according to Bloomberg.
Chevron Corporation’s (NYSE:CVX) subsidiaries are purchasing interests in two blocks in the Kurdistan Region of Iraq. Through these transactions Chevron will acquire Reliance Exploration & Production DMCC’s 80 percent stake and operations of the production sharing contracts that cover the Rovi and Sarta blocks. These blocks are north of Erbil and contain a combined area of around 490 square miles. The subsidiaries in question will partner with OMV Rovi GmbH and OMV Sarta GmbH, which hold 20 percent interest in the Rovi and Sarta PSCs, respectively.
The Travelers Companies, Inc. (NYSE:TRV) commented that its second quarter “reflected underlying underwriting margin improvement across all segments and strong net investment income given the continuing low interest rate environment. Our second quarter net income of $499 million benefited from meaningful improvement in our underlying underwriting margins as well as strong net investment income given the continuing low interest rate environment. However, earnings were also impacted by weather-related losses which, while much lower than in the prior year quarter, were considerably higher than we would have expected based on historical experience. We continue to be very pleased with pricing trends across our businesses.”
United Technologies Corp. (NYSE:UTX) is said by sources to Reuters, to be in final discussions to divest its Rocketdyne unit to GenCorp. (NYSE:GY), which a manufacturerer of aerospace propulsion systems.
Verizon Communications Inc. (NYSE:VZ) has added 120,000 net new FiOS Video connections in the second quarter.
JPMorgan Chase & Co. (NYSE:JPM) is among the largest creditors of the bankrupt Tribune Co., along with Oaktree Capital (OAK), but the two firms have not so far indicated their plans for the company once it exits bankruptcy, which could be within weeks. Sources to The New York Post say that the owners might use its most alluring property, The Los Angeles Times, to obtain bids for its other newspapers.
3M Co. (NYSE:MMM) and Ivoclar Vivadent have resolved their respective lawsuits in Germany and the in the United States. It was alleged in the The Ivoclar Vivadent lawsuits that 3M FiltekTM composite dental restoratives infringed its patents, but the firm has voluntarily withdrawn its German and U.S. patent infringement suits against 3M, which has allowed the settlement.
Microsoft Corporation’s (NASDAQ:MSFT) Windows Phone software will only produce a 4 percent share of the U.S. smartphone market in 2012, calculates the research firm Strategy Analytics, according to Boy Genius.
Pfizer Inc. (NYSE:PFE), which is partner to Ligand Pharmaceuticals (NASDAQ:LGND) reports that the European Medicines Agency has accepted for review the Marketing Authorization Application for bazedoxifene/conjugated estrogens, which is a potential new medicine for postmenopausal women with a uterus, for the treatment of estrogen deficiency symptoms and also the treatment of osteoporosis in women at risk of fracture. BZA/CE has been evaluated in a Phase III clinical development program. The drug major expects a decision from the European Commission next year.
Exxon Mobil Corp. (NYSE:XOM): Oil prices fell back on Friday in New York from their nine-week high, which stemmed a second weekly advance, says Bloomberg. Disappointing economic figures reinforced indications that the seasonal demand for oil is slowing, and the prices may well slip some more next week, according to a Bloomberg News survey.
Boeing Co. (NYSE:BA) has won a $65.8 million Lot 2 follow-on contract from the United States Air Force, for 9 B-1 Lancer bomber Integrated Battle Station modification kits, spares, training, support equipment and engineering support. IBS joins together three major aircraft modifications, including an updated front and aft cockpit; a new diagnostics system, and a new Link 16 data link. Lot 2 kit orders will be initiated immediately and the entire fleet should be upgraded by the end of 2019.
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Bank of America Corporation (NYSE:BAC): The United Kingdom’s Financial Services Authority will now enlarge its Libor rigging inquiry, which has so far concentrated upon seven financial institutions, subsequent to reports that more institutions might be implicated, according to The Financial Times.
Chevron Corporation’s. (NYSE:CVX) Chevron Australia Pty Ltd., and The General Electric Company (NYSE:GE) have reached a more than $600 million 22-year contractual services agreement, through which the compressor trains and associated equipment that will be at the heart of the Gorgon Project off the northwestern coast of Australia, will be maintained. Through the terms, General Electric Oil & Gas’ Global Services unit will provide Chevron Australia with scheduled maintenance, access to expertise through resident engineers, monitoring and diagnostics of the installed equipment coupled with engineering analytics, along with an inbuilt guarantee linked to the continuity of production. The contract will cover 22 years, with General Electric’s first contract performance manager slated to start working in Perth in October of this year.
Pfizer Inc. (NYSE:PFE) reports that the Committee for Medicinal Products for Human Use of the European Medicines Agency has adopted a positive opinion, and recommends that crizotinib be granted conditional marketing authorization in the European Union, for the treatment of adults suffering from previously treated anaplastic lymphoma kinase-positive advanced non-small cell lung cancer. The CHMP’s positive opinion will be evaluated by the European Commission, which possesses the authority to approve medicines for the European Union, and Pfizer expects a decision from the Commission in the coming months. Upon crizotinib being granted conditional marketing authorization, the firm will be required to submit data to the EMA from the recently completed PROFILE 1007 study, which has met its primary endpoint in previously treated ALK-positive advanced NSCLC patients. Subsequent to a review of the 1007 results by CHMP, the European Commission would then consider the conversion of the conditional marketing authorization to a normal marketing authorization.
AT&T, Inc.’s (NYSE:T) and Verizon’s (NYSE:VZ) shares have traded almost in lockstep in the past year, however, AT&T might have the advantage going forward, as its dividend is likely to continue growing, says Barron’s. Additionally, earlier in 2012, the form said that it would spend $9 billion to repurchase almost 5 percent of shares outstanding, Verizon has not been actively buying back stock. On Thursday, Verizon Wireless reported that it added 1.2 million subscribers in second quarter for a total of 94.2 million, but last quarter AT&T saw its wireless base increase to 103.9 million. Barron’s believes that while the stock is unlikely to soar, investors seeking a defensive dividend move might take note of AT&T. In the meantime, Verizon Wireless, which is the nation’s largest cellphone carrier, is gaining fewer new contract subscribers. However, its profit remains strong because of increasing revenue from mobile data, which it collects for Internet use, and impressive smartphone sales.
Wal-Mart Stores Inc. (NYSE:WMT) is a top advocate of a bill in Congress would allow states to collect sales tax from out-of-state merchants that sell to their residents. If it does become law, online retailers such as Amazon.com, Inc. (NASDAQ:AMZN), which now mostly do not collect sales tax, will lose a price advantage which has allowed them to take market share from Wal-Mart, according to Bloomberg.
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