FOSTER CITY, CA--(Marketwire -05/09/12)- SciClone Pharmaceuticals, Inc. (SCLN) today reported financial results for the first quarter ended March 31, 2012. Revenues increased by 81% for the quarter ended March 31, 2012, to $39.2 million, compared to revenues for the same period in the prior year of $21.7 million. The increases in revenues in the first quarter were due to the continued growth of the ZADAXIN business in China and the inclusion of the NovaMed Pharmaceuticals, Inc. (NovaMed) revenues since the date of the acquisition on April 18, 2011. For the first quarter ending March 31, 2012, ZADAXIN revenues increased 37% to $29.8 million compared to revenues for the same period in the prior year of $21.7 million, and revenues attributable to the primary care and oncology product lines were $9.4 million.
On a pro forma basis, assuming NovaMed had been acquired on January 1, 2011, revenues for the quarter ended March 31, 2012 would have been $39.2 million compared to $28.2 million for the same period in the prior year, an increase of $11.0 million.
"We are pleased to report that SciClone delivered a strong first quarter 2012 performance with 37% ZADAXIN revenue growth year over year, clearly growing ahead of the market. All our key products, ZADAXIN, Depakine® and Aggrastat®, contributed to this excellent start for 2012," said Friedhelm Blobel, Ph.D., SciClone President and Chief Executive Officer. "We recently marked the one-year anniversary of the SciClone-NovaMed acquisition, which was an occasion to celebrate the significant accomplishments we've made integrating our two companies. Our sales and marketing focused China team, which now includes approximately 850 professionals, has greatly enhanced our ability to expand commercial efforts more deeply and widely throughout the China market, resulting in the increasing market uptake of our expanded product portfolio. We believe we have created a broad foundation for continuing to deliver strong financial results in 2012 and further solidifying our position within the top tier of specialty pharmaceutical companies in China."
On a GAAP basis, SciClone's net income for the first quarter of 2012 was $8.7 million, compared with $3.8 million for the same period in the prior year, or $0.15 per share on both a basic and diluted basis for the three months ended March 31, 2012, compared with $0.08 per share on both a basic and diluted basis for the same period in the prior year.
SciClone's non-GAAP net income for the first quarter of 2012 was $9.6 million, compared with non-GAAP income of $4.9 million for the same period in the prior year, or $0.17 and $0.16 per share on a basic and diluted basis, respectively, for the three months ended March 31, 2012, compared with $0.10 per share on both a basic and diluted basis for the same period in the prior year. Basic and diluted earnings per share for the 2012 period reflect the issuance of 8.3 million shares of common stock as part of the acquisition of NovaMed in April 2011.
SciClone believes this non-GAAP information is useful for investors, taken in conjunction with SciClone's GAAP financial statements, because management uses such information internally for its operating, budgeting and financial planning purposes. Non-GAAP information is not prepared under a comprehensive set of accounting rules and should only be used to supplement an understanding of SciClone's operating results as reported under GAAP. The non-GAAP calculations and reconciliation to comparable GAAP measures were derived principally as a result of the NovaMed acquisition and are provided in the accompanying table titled "Reconciliation of GAAP to Non-GAAP Net Income."
Research and development (R&D) expenses for the first quarter of 2012 totaled $3.4 million, compared with $3.1 million for the same period in the prior year. Following the Company's announcement on March 2, 2012 regarding the futility of our SCV-07 clinical development program in oral mucositis, the Company has taken certain steps to reduce its future US-based clinical development expenses this year and expects further substantial decreases in R&D expenses in 2013. The increase in R&D for the quarter was primarily related to severance costs associated with the discontinuation of the Company's SCV-07 program, and to a lesser extent to the addition of NovaMed's research and development expenses since its acquisition in April 2011, offset partially by a decrease in third-party expenses related to the discontinuance of our US-based clinical development programs.
Sales and marketing expenses for the first quarter of 2012 were $17.6 million, compared with $5.2 million for the same period in the prior year. The increase of $12.4 million was primarily a result of the addition of approximately 450 sales and marketing employees through the acquisition of NovaMed in April 2011, as well as the additional expansion of the Company's sales team by approximately 100 sales representatives in the fourth quarter of last year, which significantly expanded SciClone's sales and marketing capabilities. The Company now has a combined sales organization comprised of approximately 850 sales and marketing focused professionals in China.
General and administrative expenses for the first quarter of 2012 were $4.0 million, compared with $6.0 million for the same period in the prior year. The decrease in 2012 was primarily due to lower professional services fees related to the Company's FCPA investigation, class action and derivative lawsuits, and professional expenses in connection with the NovaMed acquisition, partially offset by increases in general and administrative expenses attributable to NovaMed operations.
At March 31, 2012, cash and investments totaled $74.9 million, compared with $67.0 million at December 31, 2011. The increase in SciClone's cash balance was primarily due to the cash generated by the Company's commercial operations, partially offset by $1.1 million used in the first quarter for the repurchase of SciClone stock.
Conference Call Today
SciClone is hosting a conference call today at 4:30 pm ET to provide a financial update. The call will be hosted by Friedhelm Blobel, Ph.D., President and CEO, Gary Titus, Senior Vice President and CFO.
LIVE CALL:
866 730.5768 (U.S./Canada)
857 350.1592 (International)
Passcode: 27284305
REPLAY:
888 286.8010 (U.S./Canada)
617 801.6888 (International)
Passcode: 13769826
(Replay available from Wednesday, May 9, 2012, at 6:30 pm ET until 11:59 pm ET on Wednesday, May 16, 2012)
The conference call will contain forward-looking statements. Interested parties who wish to listen to the webcast should visit the Investor Relations section of SciClone's website at www.sciclone.com. The information provided on the teleconference is accurate only at the time of the conference call, and SciClone will take no responsibility for providing updated information except as required by law.
About SciClone
SciClone Pharmaceuticals is a revenue-generating, profitable, specialty pharmaceutical company with a substantial commercial business in China and a product portfolio of therapies for oncology, infectious diseases and cardiovascular, urological, respiratory, and central nervous system disorders. SciClone's ZADAXIN® (thymalfasin) is approved in over 30 countries and may be used for the treatment of hepatitis B (HBV), hepatitis C (HCV), and certain cancers, and as a vaccine adjuvant, according to the local regulatory approvals. Besides ZADAXIN, SciClone markets about 15 mostly partnered products in China, including Depakine®, the most widely prescribed broad-spectrum anti-convulsant in China; Tritace®, an ACE inhibitor for the treatment of hypertension; Stilnox®, a fast-acting hypnotic for the short-term treatment of insomnia (marketed as Ambien® in the US); and Aggrastat®, a recently-launched interventional cardiology product. SciClone is also pursuing the registration of several other therapeutic products in China. SciClone is headquartered in Foster City, California. For additional information, please visit www.sciclone.com.
Forward-Looking Statements
This press release contains forward-looking statements regarding expected financial results and expectations. Readers are urged to consider statements that include the words "may," "will," "would," "could," "should," "might," "believes," "estimates," "projects," "potential," "expects," "plans," "anticipates," "intends," "continues," "forecast," "designed," "goal," "unaudited," "approximately" or the negative of those words or other comparable words to be uncertain and forward-looking. These statements are subject to risks and uncertainties that are difficult to predict and actual outcomes may differ materially. These include risk and uncertainties relating to: the course, cost and outcome of regulatory matters, including pricing decisions by authorities in China; the on-going regulatory investigations; the Company's ability to execute on its goals in China and on its objectives for revenue in fiscal 2012; the challenges presented by integrating an acquired business into existing operations; the variability in earnings on a GAAP basis that may result from non-cash charges related to the NovaMed acquisition; the dependence on third party license, promotion or distribution agreements including the need to renew such agreements; operating an international business; the clinical trial process, including the regulatory approval and the process of initiating trials at, and enrolling patients at, clinical sites; the effect of changes in its practices and policies related to the Company's compliance programs. SciClone cannot predict the timing or outcome of the SEC and DOJ investigations, or of the level of its efforts required to cooperate with those investigations, however the Company has incurred substantial expenses in connection with the investigations and related litigation and expects to incur additional expense and the investigations could result in fines and further changes in its internal control or other remediation measures that could adversely affect its business. Please also refer to other risks and uncertainties described in SciClone's filings with the SEC. All forward-looking statements are based on information currently available to SciClone and SciClone assumes no obligation to update any such forward-looking statements.
Ambien, Depakine, Stilnox and Tritace are registered trademarks of Sanofi and/or its affiliates.
Aggrastat is a registered trademark of Medicure International Inc. in the United States, and Iroko Cardio LLC in numerous other countries.
SciClone, SciClone Pharmaceuticals, the SciClone Pharmaceuticals design, the SciClone logo and ZADAXIN are registered trademarks of SciClone Pharmaceuticals, Inc. in the United States and numerous other countries.
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share amounts) Three Months Ended March 31, ------------------------ 2012 2011 ----------- ----------- Net revenues: Product sales $ 31,258 $ 21,662 Promotion services 7,905 -- ----------- ----------- Total revenues, net 39,163 21,662 Operating expenses: Cost of product sales 4,941 3,103 Sales and marketing 17,640 5,228 Amortization of acquired intangible assets, related to sales and marketing 884 -- Research and development 3,393 3,109 General and administrative 3,961 5,958 Contingent consideration* (916) -- ----------- ----------- Total operating expenses 29,903 17,398 ----------- ----------- Income from operations 9,260 4,264 Non-operating income (expense): Interest income 30 20 Interest expense (55) (57) Other (expense) income, net (1) 15 ----------- ----------- Income before provision for income tax 9,234 4,242 Provision for income tax 554 393 ----------- ----------- Net income $ 8,680 $ 3,849 =========== =========== Basic net income per share $ 0.15 $ 0.08 Diluted net income per share $ 0.15 $ 0.08 Weighted average shares used in computing: Basic net income per share 57,701 48,020 Diluted net income per share 59,691 50,402 UNAUDITED SELECTED BALANCE SHEET DATA (in thousands) March 31, December 31, 2012 2011 ------------- ------------- Cash and investments $ 74,855 $ 67,018 Accounts receivable 42,056 42,226 Inventories 8,518 8,813 Intangible assets, net 44,428 45,185 Goodwill 32,074 31,973 Total assets 206,997 200,326 Total current liabilities 24,114 25,284 Contingent consideration 14,484 15,400 Deferred tax liabilities 8,351 8,715 Borrowing on line of credit 2,500 2,500 Total shareholders' equity 159,649 150,458 RECONCILIATION OF GAAP TO NON-GAAP NET INCOME (in thousands, except per share amounts) (unaudited) Three Months Ended March 31, ---------------------------- 2012 2011 ------------- ------------- GAAP net income $ 8,680 $ 3,849 Non-GAAP adjustments: Employee stock-based compensation 922 525 Contingent consideration (916) -- Amortization of acquired intangible assets 884 -- Acquisition related costs -- 562 ------------- ------------- Non-GAAP net income $ 9,570 $ 4,936 ============= ============= Non-GAAP basic net income per share $ 0.17 $ 0.10 Non-GAAP diluted net income per share $ 0.16 $ 0.10 Weighted average shares used in computing: GAAP and Non-GAAP basic net income per share 57,701 48,020 GAAP and Non-GAAP diluted net income per share 59,691 50,402
SciClone management uses these non-GAAP financial measures to monitor and evaluate the Company's operating results and trends on an on-going basis and internally for operations, budgeting and financial planning purposes. SciClone believes the non-GAAP information is useful for investors by offering them the ability to better understand how management evaluates the business. These non-GAAP measures have limitations, however, because they do not include all items of income and expenses that affect SciClone. These non-GAAP financial measures that management uses are not prepared in accordance with, and should not be considered in isolation of, or as an alternative to, measurements required by GAAP.
SciClone's non-GAAP financial measures exclude the following items from GAAP net income and net income per share:
- Employee stock-based compensation. The effects of non-cash employee stock-based compensation.
- *Contingent consideration. The contingent consideration related to the acquisition of NovaMed is re-measured each reporting period and the change in fair value is recorded as an adjustment to operating expense. SciClone's non-GAAP financial measure excludes the change in fair value of the liability for contingent consideration in connection with the acquisition of NovaMed.
- Amortization of acquired intangible assets. We recorded intangible assets in connection with the acquisition of NovaMed. The amortization of these intangible assets is excluded from SciClone's non-GAAP financial measure.
- Acquisition related costs. We incurred certain one-time acquisition costs related to the acquisition of NovaMed. The effects of these acquisition related costs are excluded from SciClone's non-GAAP financial measure.
MIDEAST STOCKS-Gulf markets, Egypt rise on bargain-hunting - Reuters
By David French
DUBAI May 21 (Reuters) - Egypt's bourse and most Gulf markets rose on Monday as investors bought stocks oversold in recent days on euro zone fears, while a rise in oil prices helped improve local sentiment.
Having hit a 2012 low on Friday, Brent crude rose 73 cents to $107.87 a barrel by 1246 GMT on hopes China could take steps to stimulate growth and lift fuel demand at the world's second largest oil user.
However, the spectre of European sovereign debt and a potential 'Grexit' event - Greece leaving the euro zone - would continue to be a primary driver of regional trading on a lack of domestic catalysts.
"The valuations for some of the names, even a couple of weeks ago, were very attractive but, recently, international sentiment has been driving the market lower," said Amer Khan, fund manager at Shuaa Asset Management, referring to exchanges in the United Arab Emirates and Saudi Arabia.
"Many stocks have been oversold recently so we were expecting a pick-up and that it what we've got today. But we will continue to take our lead from international markets as there are no local catalysts."
Volumes, which slumped on Sunday, recovered somewhat - the number of shares traded on the Dubai exchange was more than double Sunday's figure. This, traders said, was a good sign as investors were not dumping stocks in volatile markets and, instead, were waiting to return when opportunities arose.
"We've recovered from 1,460-1,465 and there were minimal volumes on the downside as investors were not willing to sell at those levels," said Musa Haddad, head of MENA equity desk at National Bank of Abu Dhabi, about Dubai's bourse.
Dubai's index made its largest one-day gain in four weeks, climbing 1.5 percent to 1,488 points. Continued...
NATO chief sees financial aid for Afghan forces - Bay News 9
(AP) — NATO's secretary-general says he's optimistic that the international community will continue to finance the Afghan security forces.
"This summit is not a pledging conference, but nevertheless a number of countries have announced substantial contributions to the Afghan security forces, so I'm optimistic," Anders Fogh Rasmussen told CNN's "State of the Union" on Sunday.
The international community in general has a responsibility and interest in ensuring the Afghan forces take full responsibility for the country's security after 2014 to prevent terrorists from reestablishing safe havens and launching attacks against Europe and the United States, the NATO chief said.
The Afghan security forces are expected to cost about $4.1 billion a year. The Afghan government will pay about $500 million of that, and the rest will come from donors. The NATO summit, which opens in Chicago on Sunday, is not a pledging conference, but there will be much talk about who will pay. About $1.3 billion is expected to come from nations in the NATO coalition other than the United States. Pledges for about a third of that have been announced by Australia and European nations. U.S. taxpayers and some nations outside the military coalition likely will make up the $2.3 billion difference.
President Barack Obama is expected to meet with Afghan President Hamid Karzai on the summit's sidelines to discuss planning for Afghanistan's 2014 elections and the prospect of a political settlement with the Taliban. NATO's plans keep foreign forces in Afghanistan through the 2014 election but withdrawing by 2015.
Fogh Rasmussen pointed to Afghanistan as an example of NATO interests extending beyond the alliance countries' borders.
"We are in Afghanistan to prevent the country from once again becoming a safe haven for terrorists, who can use that safe haven as a launching pad for terrorist attacks against Europe and North America," he said. "So though territorial defense remains the core task of NATO, we realize that defense of our borders may well start far from our borders in today's world."
US Stocks Rise As G-8 Talks, European Gains Boost Sentiment - 4-traders (press release)
--Stock futures rise on the back of gains in Europe
--Europe up after G-8 affirms interest in keeping Greece in euro zone
--Weekend polls show Greece's conservative party gains ground
By Matt Jarzemsky Of
U.S. stocks opened higher, bouncing from a recent stretch of sharp declines, as broad gains in European markets helped soothe some fears about the euro zone and Greece.
The Dow Jones Industrial Average futures climbed 38 points, or 0.3%, to 12408. The Dow suffered its sixth consecutive loss, and 12th in 13 sessions on Friday. The last 13-session stretch with 12 losses occurred in October 1974.
Standard & Poor's 500-stock index added 4 points, or 0.3%, to 1299 and the Nasdaq Composite advanced 6 points, or 0.2%, to 2785.
European markets were mostly higher, with the Stoxx Europe 600 up 0.2%, after the Group of Eight leading industrialized nations affirmed over the weekend that they wanted Greece to remain in the euro zone.
"People are positive about what's coming out of the G-8," said Doreen Mogavero, president of Mogavero Lee & Co., a New York brokerage. "It looks like the politicians are willing to work together and move forward."
Also supporting sentiment, weekend polls showed support was growing for the Greek conservatives, which helped ease worries about the political turmoil in the country.
Asian markets were also mostly higher, helped along by pro-growth comments made by Chinese Premier Wen Jiabao. Japan's Nikkei Stock Average gained 0.3% and China's Shanghai Composite added 0.2%.
Crude-oil futures tacked on 0.2% to $91.65 a barrel, while gold futures inched down 0.3% to $1,587.10 an ounce. The U.S. dollar rose against the euro and the yen.
There are no major U.S. economic data due during the day.
Facebook fell 8.4% to start the second day of trading. The social media company's stock opened on Friday for trading at $42.05, or about 11% above its initial public offering price of $38, before closing at $38.23.
Lowe's recently fell 9.7% after the home-improvement retailer reported fiscal first-quarter results that topped analyst estimates, according to FactSet Research, but lowered its full-year earnings outlook, citing a cautious view of the housing macroeconomic environment.
BlackRock shed 2.7% after Barclays said it planned to sell its $6.1 billion stake in the asset-management company. BlackRock agreed to repurchase $1 billion in Barclays's stake.
Ultra Clean Holdings climbed 7.7% after the semiconductor equipment maker agreed to buy American Integration Technologies for $99 million.
Campbell Soup slipped 2.1% after the company reported fiscal third-quarter earnings that topped estimates but revenue fell a bit shy as volume declined.
-By Matt Jarzemsky, Dow Jones Newswires; 212-416-2240; matthew.jarzemsky@dowjones.com
As business suffers, David Cameron retreats - Daily Telegraph
Taken together, these two factors deter employers from recruiting new staff and hinder businesses from developing the higher productivity on which sustainable growth depends. And far from making things better, the past decade has seen a steady increase in the level and complexity of employment law. Beecroft’s report would have reduced the amount of regulation in a comprehensive and principled way – and, by doing so, would have introduced new certainty and confidence.
That confidence matters, because businesses are far too short of it at present. British businesses collectively hold about £750 billion in cash. To reach its fiscal targets, the Government needs a steep rise in investment – the rate at which they spend that money. Speaking last week, David Cameron said that he leads “a Government resolutely committed to being on the side of enterprise, entrepreneurs, businesses large and small, wealth creation of all types and descriptions”. To many, that is clearly not the case. A full-blooded Beecroft Review would reassure such people, just as a pale imitation would reinforce their concerns.
Taking a step back, today’s news adds to a sense of unease about what the Coalition is actually trying to achieve. This is a Government that claims to have deregulation at its heart, fired by a Tory belief in free markets and a Lib Dem distrust of central direction. It has a policy to stop the growth in regulation (so-called “One In, One Out”) and to reduce the stock of it (the “Red Tape Challenge”). In general, it is supposed to have rejected an old approach based on more debt and higher state spending, and to be looking for real growth via higher productivity.
Recently, however, we have seen a weakening in the Government’s position. Last autumn, the Chancellor pushed his deficit reduction target from the end of this Parliament into the middle of the next. Last week, the Prime Minister hinted at new borrowing to finance infrastructure – exactly the way that Gordon Brown justified his record spending increases. At the same time, the retreat over the NHS has cast a long shadow over the Coalition’s commitment to public-service reform, and its changes to the planning system are taking much longer than expected.
In recent days, the Prime Minister has urged his European counterparts to take action by saying that the eurozone is “at a crossroads”. He should hold his own Government to account in the same terms. Given the challenges facing the country, it is surprising that he needed an independent report to propose changes to employment law at all. Now that he has it, it will be remarkable if he does not implement it – and then keep up the pressure.
Mr Cameron is right that the country’s basic economic problems are due to poor productivity rather than lack of government action. He will know, however, that the contrary view is growing in popularity (and, indeed, capable of winning elections in other countries). The more his policies focus rigorously and consistently on improving the efficiency of the economy, the more successful they will be.
Andrew Haldenby is director of the independent think tank Reform
Small business group calls for extension to New Enterprise Allowance - stockmarketwire.com
The New Enterprise Allowance (NEA) should be extended to encourage more budding entrepreneurs to use the scheme, the All Party Parliamentary Small Business Group (APPSBG) said.
Current rules allow jobless entrepreneurs to apply for funding of £1,274 plus access to a guaranteed loan of up to £1,000 – but only after they have been claiming Jobseekers Allowance (JSA) for six months.
Now the APPSBG is calling for the New Enterprise Allowance to be made available from day one of signing onto JSA and for funds to be available for a full year to provide £3,692 plus the guarantee of a loan of up to £2,000. The APPSBG believes that this would encourage more budding entrepreneurs to set up in business, in turn helping to boost the economy and stem high unemployment.
The APPSBG is concerned that the current funding is too low to enable budding entrepreneurs to get viable business ideas off the ground – a view supported by figures from the FSB, which show it costs 14 per cent of small businesses between £2,500 and £5,000 to set up.
Also in the new report, ‘Breaking down the barriers to entrepreneurship', the APPSBG is calling on the Government to: Support enterprise education in schools and colleges by incorporating it into the statutory curriculum Create a one-stop-shop to provide advice and support, such as a Small Business Administration Adopt and put in place the Breedon recommendations to bolster alternative sources of finance Provide a support network for older entrepreneurs to ensure that Jobcentre Plus builds relationships with women's networks to promote mentoring for women
The report comes following an Entrepreneurship Inquiry launched by Iain Duncan Smith MP, Secretary of State for Work and Pensions to see how the barriers to self-employment can be removed and entrepreneurs can be supported in setting up their business in difficult economic times.
John Walker, National Chairman, Federation of Small Businesses, said: "As this report shows, breaking down the barriers to entrepreneurship is crucial if we are to turn the economy around. We all know that unemployment is worryingly high. That is why it is even more important to make it more attractive to go it alone, and encourage those that have a great business idea to make it a reality. The current New Enterprise Allowance does not achieve this. But if the Government extends the scheme to make funds available and at higher rate, more budding entrepreneurs will be encouraged to become self-employed."
Brian Binley MP, Chair of the APPSBG, said: "What this report shows is the importance of nurturing business and developing the culture to enable it to thrive. Not only must we create the conditions to help ensure that the education and financial systems are available to supply potential entrepreneurs, but society embraces the enterprise culture whose full potential is yet to be explored is these difficult times."
Karen Freyer, Managing Director of the Creative society, said: "Since 2009 we have been pushing for the reintroduction of the Enterprise Allowance Scheme but as it stands it does not go far enough. The FSB is absolutely right to push for its extension to help reduce unemployment and drive economic recovery"
Shaun Williams, Director of Corporate Affairs at Leonard Cheshire Disability said: "It is vital more disabled people are given the funding support they need to increase self-employment opportunities. Extending the New Enterprise Allowance scheme to make funds available at higher rate will enhance their chances of success. Our research shows a quarter of disabled people in work are self-employed as this is often the only viable option."
Richard Morris, founder and CEO of Heropreneurs, the only independent military charity to support armed forces leavers and veterans into business, said: "What is clear from this report is that entrepreneurs urgently need more financial support to enable them to start up and meet operational costs. The barriers which block the emergence of new and small banks must be rapidly taken down because we need more loan funds not less. It is bad for the UK economy that these barriers remain."
Story provided by StockMarketWire.com
US stocks gain on unemployment report - Yahoo Finance
Stocks rose modestly on Wall Street Thursday, breaking a six-day losing streak for the Dow Jones industrial average, after the government said weekly jobless claims edged down.
The lower jobless number suggests that employers may accelerate hiring this month.
In late morning trading, the Dow rose 27 points to 12,862. The Standard & Poor's 500 index gained four points to 1,358. The Dow had been up 96 points earlier.
The tech-heavy Nasdaq composite index fell six points to 2,928. Cisco Systems, one of the 30 stocks in the Dow average, plunged 9 percent after the networking giant warned investors that technology spending appeared to be slowing down and that its revenue would rise much less than analysts had been expecting this quarter. Hardware maker Oracle fell 2 percent.
Before Thursday, the Dow had fallen for six days in a row, its longest losing streak since August. Investors were encouraged by the Labor Department's report that applications for unemployment benefits dropped 1,000 to 367,000 in the week ending May 5. The four-week average, which economists watch more closely, fell 5,250 to 379,000. When that figure remains consistently below 375,000, it suggests that job growth is strong enough to lower the unemployment rate.
The numbers could dispel nascent fears that that strongest yearly start for hiring since the recession ended 2009 was sputtering.
Stocks also benefited from news that Spain would take over Bankia SA, the country's fourth-largest bank, which has high exposure to bad property loans. The government is hoping to convince investors that Spain won't need a bailout.
"Europe's problems are by no means being solved. But the feeling that there is some support there probably helps sentiment a little bit," said Ed Hyland, a global investment specialist with J.P. Morgan Private Bank.
The news helped U.S. financial stocks, which would be vulnerable to an increase in financial stress in Europe. Citigroup rose 1.6 percent and JPMorgan Chase rose 1 percent.
European stocks rose. Spain's IBEXC 35 index jumped 3.1 percent on the Bankia news and a drop in Spain's borrowing costs. Britain's FTSE 100 rose 0.2 percent, Germany's DAX rose 0.6 percent.
Other U.S. stocks on the move included:
— Pfizer rose 1.6 percent after the drugmaker got preliminary approval for an arthritis drug.
— Avon fell 2.1 percent after beauty products maker Coty Inc. raised its offer to buy Avon but also said it will withdraw the latest bid if it doesn't get a response by the close of business Monday.
— Kohl's fell 3 percent after price-cutting led to a 23 percent drop in its first-quarter profit.
Oil prices rose 21 cents to $97.45 per barrel.
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