What’s the Story

by CC August 10, 2012 9:16 am • Commentary


U.S. import prices unexpectedly fell in July for the fourth straight month as costs declined for imported oil, industrial supplies and many consumer goods, further icing inflation pressures.

Overall import prices dropped 0.6 percent last month, the Labor Department said on Friday.

Import prices have only risen once in the last eight months.

Analysts had expected import prices would rise 0.1 percent in July, and the decline could give the U.S. Federal Reserve more scope to ease monetary policy if policymakers think the economy needs it.


China’s July exports rose just 1 percentfrom a year earlier, the weakest reading since January and well below forecasts for a rise of 8.6 percent. Imports meanwhile rose 4.7 percent in July from a year ago, the weakest pace since April and also well short of forecasts for a 7.2 percent rise.

The numbers followed weak numbers from China on Thursday that already had investors betting on further monetary easing soon.


European markets were broadly lower, with the Stoxx Europe 600 down 0.4% and on track for the first loss in six sessions.

Weighing on sentiment, China’s trade surplus for July narrowed sharply to $25.1 billion from $31.7 billion in June, while forecasts called for an increase to $35.2 billion.

Asian markets also fell, with China’s Shanghai Composite slipping 0.2% and Japan’s Nikkei Stock Average shedding 1%.

Crude-oil futures slumped 1.5% to $91.92 a barrel, as crude-oil imports by China, the world’s second-largest oil consumer, fell in July to the lowest level in nine months. In addition, the International Energy Agency cut its oil-demand growth forecast for 2013.

Gold futures lost 0.5% to $1,612.30 an ounce. The dollar gained ground against the euro, but slipped against the yen.

In corporate news, shares of Yahoo fell 4.3% in premarket trading after the Internet company said recently appointed Chief Executive Marissa Mayer intends to review, among other things, the company’s previously announced plan to return nearly all of the proceeds from the sale of its stake in Alibaba to shareholders.

J.C. Penney shed 1.6% after the department-store chain reported a wider-than-expected fiscal second-quarter loss, less-than-forecast revenue and said it no longer expects to achieve its full-year earnings outlook.

Manchester United is due to begin trading on the NYSE after the open. The 16.7 million share initial public offering priced at $14 a share, below the expected range of $16 to $20.

Nvidia rallied 4.4% after the graphics-chip maker’s quarterly profit and outlook topped analysts’ projections.


Monster Beverage Corp on Thursday said a state attorney general has begun investigating the ingredients and advertising of its flagship, namesake energy drink.

Monster said the probe is at an early stage, and that it did not know whether it would lead to any action or materially hurt its financial results or operations.


Research In Motion Ltd. (RIMM)’s enterprise-services unit has attracted the interest of International Business Machines Corp. (IBM), according to two people familiar with the situation.

IBM made an informal approach about possibly acquiring the division, which operates a network of secure servers used to support RIM’s BlackBerry devices, said one of the people, who asked not to be named because the matter is private. RIM shares rose as much as 9.2 percent in early U.S. trading.

No party has shown interest in buying all of RIM or the division that makes its phones, and the Canadian company is inclined to wait for the rollout of BlackBerry 10 phones next year before making any decisions on a sale, the person said. No talks are currently under way, according to the person.


The board of Ralph Lauren Corp. RL approved adding $500 million to the New York-based company’s authorization for buying back Class A common shares. This brings to $777 million the total available for repurchasing stock, the company said.

Dunkin’ Brands Group Inc. DNKN said certain stockholders would put up to sale about 21 million common shares. The stock will be sold via a secondary offering under a shelf registration statement filed with the Securities and Exchange Commission; Citigroup will act as sole underwriter. Canton, Mass.-based Dunkin’ Brands will receive no proceeds from the offering. The company also said it’s entered in an agreement to repurchase 15 million shares from certain of the selling stockholders, a transaction that would occur concurrently with the closing of the offering and be priced at the offering price.

In a similar move announced late Thursday, Pittsburgh-based GNC Holdings Inc. GNC said it would make a secondary offering of 10 million Class A common shares. The stock is being sold by Ares Corporate Opportunities Fund II LP and the Ontario Teachers’ Pension Plan Board. The company has filed with the SEC a registration statement and prospectus in connection with the offering. Pittsburgh-based GNC also said it’s agreed to repurchase 6 million shares of Class A common directly from Ares in a private transaction at the offering price. This would take place immediately following the closing of the offering, in which Goldman Sachs will serve as sole underwriter. The transaction will be made in connection with GNC’s previously announced $300 million stock-repurchase program. The company also said that since the end of July, it’s acquired 1.5 million shares in the open market under the buyback program. The offering is expected to close on Aug. 15, GNC said.

Sprint Nextel Corp. S priced $1.5 billion of 7% notes due 2020, an underwritten public offering expected to close Aug. 14. Net proceeds will be used for, among other things, potential funding of Clearwire Corp. CLWR and a Clearwire subsidiary as well as redemptions or service requirements of outstanding debt and network expansion and modernization, the company said.

Shares of Manchester United MANU are scheduled to begin trading Friday on the New York Stock Exchange, culminating a closely scrutinized initial public offering for the fabled U.K. football club. Nearly 16.7 million Class A ordinary shares are going up for sale at a price of $14 each. Half of the shares are being sold by Manchester United, while owner Malcolm Glazer and his family are selling the other half. Underwriters have an option to buy up to 2.5 million additional shares from the Glazers if warranted by investor demand. Read more about Manchester United’s IPO.


Nvidia posted strong second-quarter results and third-quarter revenue guidance as the chip maker benefits from its new graphics processor and its push into the mobile market. The company will also supply chip to Lenovo Group Ltd. (LNVGY, 0992.HK) on a device running Microsoft Corp.’s (MSFT) Windows RT operating system, people familiar with the matter said, adding to that mobile market push. Shares rose 4.6% to $15.39 premarket.

Research in Motion Ltd. (RIMM, RIM.T) won a small but potentially important ruling after a U.S. judge overturned a jury’s finding that the BlackBerry maker had infringed the intellectual property of another company. The ruling vacates an award of $147.2 million in damages the company was ordered by the jury to pay Mformation Technologies Inc. This comes amid news that Samsung Electronics Co. (SSNHY, 005930.SE) said it hasn’t considered a takeover of RIM, despite analyst speculation. Shares rose 6.2% to $8.28 in premarket trading.

Monster Beverage Corp. (MNST), a U.S. maker of energy drinks, disclosed that it received a subpoena from an unnamed state attorney general in July as part of an investigation into its flagship product. The probe involves the “advertising, marketing, promotion, ingredients, usage and sale” of the Monster Energy drink brand, the company reported in a regulatory filing with the Securities and Exchange Commission Thursday. Shares fell 5.2% to $58.00 premarket.

Spectrum Pharmaceuticals Inc. (SPPI) said the biotechnology company’s board has approved an increase in its stock repurchase program, authorizing the repurchase of up to a total of $100 million of the company’s common stock, up from the previously authorized $25 million. Shares 3.6% to $12.54 premarket.

Roundy’s Inc. (RNDY), a Midwest grocery chain operator, reported second-quarter earnings below expectations, along with a same-store sales decrease of 3.3%. Chief Executive Robert Mariano said the results “reflect the ongoing efforts of a challenging economic environment on our business and our consumers.” The company also lowered its fiscal year guidance. Shares fell 21% to $8.04 in premarket trading.

Yahoo Inc. (YHOO) warned Thursday that as part of a corporate review by new Chief Executive Marissa Mayer, the company may change its plans to return to shareholders most of the proceeds expected from the sale of a stake in Chinese Internet giant Alibaba Group Holding Ltd. Shares fell 4% to $15.37 in premarket trading.

Spreadtrum Communications Inc.’s (SPRD) second-quarter profit fell 36% as the chip maker logged heavy expenses, masking an increase in sales. The company’s revenue projections for the current quarter were lower than the expectations of most analysts polled by Thomson Reuters. Shares fell 13% to $16.79 in premarket trading.

Ubiquiti Networks Inc.’s (UBNT) fiscal fourth-quarter earnings rose 57% as the Internet gear maker’s revenue increased, but the company warned of the impact of counterfeit goods on demand as it issued weak guidance for the current period. Shares tumbled 39% to $9.21 premarket.

CareFusion Corp.’s (CFN) fiscal fourth-quarter earnings rose 29% amid fewer restructuring and acquisition-related charges as the medical-device company reported modest revenue growth. Shares were up 3.8% to $25.50 premarket as results topped analyst expectations.

Harman International Industries Inc.’s (HAR) fiscal fourth-quarter earnings more than doubled as sales jumped. But the company lowered its fiscal 2013 earnings guidance from its October forecast. Shares fell 2.4% to $41.50 premarket.

Antares Pharma Inc.’s (ATRS) second-quarter loss widened and results missed analyst estimates, sending shares of the pharmaceutical product development firm 6.6% lower in premarket trading to $3.80.