What’s the Story?

by CC April 30, 2012 9:15 am • Commentary


The Commerce Department said on Monday consumer income rose 0.4 percent last month. Analysts had expected a gain of 0.3 percent. After-tax income climbed 0.2 percent in March when accounting for higher prices.

Consumer spending rose 0.3 percent last month, also just below the median forecast in a Reuters poll of 0.4 percent.

When taking into account inflation, which has been fed in recent months by higher gasoline prices, spending was up 0.1 percent.


Household purchases, which account for about 70 percent of the economy, increased 0.3 percent, after a revised 0.9 percent gain the prior month that was stronger than first reported, Commerce Department figures showed today in Washington. The median estimate of 72 economists surveyed by Bloomberg News called for a 0.4 percent rise. Incomes advanced 0.4 percent, the most in three months, and the savings rate rose.


Spain’s economy slipped into recession in the first quarter as domestic demand shrank, data showed on Monday, with deep government spending cuts in an uphill battle to trim the public deficit likely to delay any return to growth.

Gross domestic product shrank 0.3 percent in January-March from the previous quarter according to preliminary National Statistics Institute data, unchanged from October-December and compared to a Reuters poll expecting a 0.4 percent contraction


Microsoft Corp. (MSFT) is making a $300 million investment in Barnes & Noble’s Nook digital-book business and college texts unit in a move that helps value the prized Nook business, the companies said. Microsoft will have a 17.6% stake in a new subsidiary for the businesses in a deal that values them at $1.7 billion, the companies said. Shares of Barnes & Noble more than doubled premarket, up 104% to $27.84 in recent trading.

Energy Transfer Partners L.P. (ETP) agreed to acquire independent refiner Sunoco in a $5.3 billion deal that would create one of the largest and most diversified energy partnerships in the U.S. ETP, a natural-gas pipeline operator, said it will pay either $50 in cash, 1.0490 ETP common units or a combination of $25 in cash and 0.5245 ETP common unit for each Sunoco share. The estimated $50.13 per-share value is a 23% premium to Sunoco’s Friday closing price. Shares of Sunoco climbed 22% to $49.75 premarket.

Humana’s first-quarter earnings fell 21% from a year-earlier period that saw a larger gain from medical claims reserves as increased membership contributed to stronger-than-expected revenue growth. The health-care company’s stock slipped 3.5% to $84.75 premarket.

Hologic Inc. (HOLX) has agreed to acquire test-maker Gen-Probe Inc. (GPRO) for about $3.7 billion in cash, as the health products company seeks to expand and diversify its diagnostics business. The deal with Hologic values Gen-Probe at $82.75 a share, a 20% premium to its Friday closing price. Shares of Gen-Probe jumped 20% to $82.24 premarket while shares of Hologic declined 3.4% to $20.50.

Warner Chilcott PLC (WCRX) is considering options, including a potential sale, after receiving interest from private-equity firms and other potential buyers, Bloomberg News reported, citing people with knowledge of the matter. Shares of the maker of women’s health-care and dermatology products rose 18% to $22.10 premarket.

Scholastic Corporation (SCHL) again raised its fiscal-year earnings guidance on stronger-than-expected sales of “The Hunger Games” trilogy following the March release of the movie based on the books for young adults. The massively successful Lions Gate Entertainment Corp. (LGF) film has approached $400 million in domestic box-office receipts. Shares of Scholastic gained 10% to $34.05 premarket.

LDK Solar Co. (LDK) swung to a loss in its fiscal fourth quarter as tumbling prices for solar products cut the company’s revenue by more than half and margins plunged into negative territory. LDK’s stock traded down 12% to $2.61 premarket.

Demand Media Inc. (DMD) was deep into discussions with a private-equity firm to complete a deal that would have taken the online-content company private for double its current value, reported All Things Digital, citing people close to the situation. Demand abandoned the effort this past week, which was born from an aggressive attempt by Boston-based Thomas H. Lee Partners to purchase the company for $1.2 billion.

Allscripts Healthcare Solutions Inc. (MDRX) has elected a new chairman, moving quickly to restore order on its board after the termination last week of its former chairman sparked the resignation of three board members and sent its shares tumbling. Shares of the provider of electronic health-care records climbed 3.4% to $10.65 premarket. On Friday its stock had tumbled 36%.

Goldcorp Inc. (GG) said the environmental permit for its 70%-owned El Morro copper-gold project has been suspended by the Supreme Court of Chile until “certain deficiencies” are corrected by the Chilean environmental permitting authority. The miner shed 0.6% to $38.90 premarket while New Gold Inc. (NGD), its 30% partner in the project, declined 2.9% to $9.73 in premarket trading.

Watson Pharmaceuticals Inc.’s (WPI) first-quarter earnings rose 22% as the drug maker reported sharply higher revenue with a boost from new generic drugs and as its branded pharmaceuticals and distribution business also posted double-digit growth. For the year, the company raised the low end of its per-share earnings estimate. Shares traded up 2.4% to $77.95 premarket.

Industrial-glass maker Apogee Enterprises Inc. (APOG) said it raised its dividend 10%, joining a growing list of firms looking to build shareholder value with bigger payouts.

Great Southern Bancorp Inc. (GSBC) agreed to assume the assets and deposits of Inter Savings Bank after Minnesota state regulators closed it.

Naugatuck Valley Financial Corp. (NVSL) said Friday it will restate its previously reported financial results after Connecticut regulators told the bank it had improperly classified some loans.

Sonabank, a subsidiary of Southern National Bancorp of Virginia Inc. (SONA), agreed to assume the assets and deposits of HarVest Bank of Maryland after state regulators closed it.