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Market Update

U.S. Wholesale Inventories Rise, Alcoa Earnings Disappoint

Author: Maureen Salinas
Last Update: 3:42 PM ET October 10 2012

12:05 PM New York U.S. indexes fell and wholesale inventories rose in August. Toshiba agreed to acquire Shaw Group''s stake in Westinghouse for $1.60 billion and Cytec agreed to divest its coating resins business to Advent. Bain Capital agreed to buy Apex Tool for $1.6 billion.

U.S. indexes dropped after Alcoa reported higher earnings but issued a weak outlook for the year and blamed uncertainty in China and in global markets.

At least 90 companies have issued or lowered current quarter earnings as of today and 20 companies have lifted the earnings views.

FedEx is targeting $1.7 billion in annual profit improvement the next three years. Separately, Chevron Corp. forecast earnings for the third quarter to be """"substantially lower"""" than the second quarter.

European indexes edged lower after the International Monetary Fund said in its latest assessment that risks to global financial stability have increased and revised higher the amount of assets banks may have to sell to complete the deleveraging process.

German Chancellor Angela Merkel met Greek Prime Minister Antonis Samaras yesterday in Athens and as labor union rioted on the streets. Chancellor Merkel urged Greece to stay in the currency union and implement the austerity measures demanded by the troika.

Asian indexes closed lower on global growth concerns with the Japanese stocks falling to a two-month low and South Korea said employment expanded.

U.S. Wholesale Inventories Rise

Wholesale inventories increased 0.5% in August following a downwardly revised 0.6% increase in July, according to a report released by the U.S. Commerce Department today.

Wholesale sales rose 0.9% in August after declining a revised 0.2% in July.

Toshiba to Acquire Shaw Group''s Stake in Westinghouse

Toshiba Corp., the Japanese electronics company agreed to buy Shaw Group Inc.''s 20% stake in nuclear power company Westinghouse Electric Co. for about 125 billion yen or $1.60 billion.

The purchase will increase Toshiba''s ownership of Westinghouse to 87% from the current 67%.

Cytec to Divest Coating Resins Business

Cytec Industries Inc. agreed to divest its coating and resins business to Advent International, a private equity firm for $1.03 billion plus assumed liabilities of $118 million bringing the total value to $1,150 million. The sale is expected to close in the first quarter 2013.

Danaher, Cooper to Sell Apex Tool Group

Danaher Corporation and Cooper Industries agreed to sell Apex Tool Group to Bain Capital for approximately $1.6 billion. Currently, Danaher and Cooper each maintain a 50% joint venture ownership interest in Apex.

Danaher expects the sale to generate after-tax net proceeds of approximately $650 million.

Earnings Review

Alcoa Inc. (A), the aluminum producer reported third quarter sales declined 9% to $5.83 billion compared with third quarter 2011, primarily due to a 17% and 20% annual respective decline in the realized metal price and realized alumina price.

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Sources: Data collected by 123jump.com and Ticker.com from company press releases, filings and corporate websites. Market data: BATS Exchange. Inc