Tag - Bg

Small-cap stocks went into a tailspin on the opening, with worries about the banking sector combining with slumping retail sales to spark a flight away from equities. At 10:01 a.m. ET, the Russell 2000 (NYSE:IWM) was down 11.62, or 2.45%, at 462.17.

The retail sales report headline figure for December came in at minus 2.7%, which swamped the median forecast for a decline of 1.2%. What’s more, the November figure was revised downward, rubbing a little sale in the wound. The ex-autos figure was off 3.1%, also way off the forecast for a decline of 1.3% and which marked a record drop. Even though this fall in retail sales was “goosed” by a 16% slide in gasoline prices, the dramatic slide in retail sales still suggests that the shock of recession and rising unemployment has stunned households, who in turn are turning off the spending spigot.

The troubling retail sales report clearly sparked money flow away from stocks and into Treasury markets. The yield on benchmark 10-year notes, which runs inverse to price, was off 2.6% early today as investors look for a safe-haven outlet away from equities.

Also within the economic data news, business inventories came in at minus 0.7%, slightly below the forecast for a drop of 0.5%. Earlier this morning the import price series tumbled 4.2%, well below the forecast for a drop of 0.5%. The drop in exports was the largest in 10 years, which isn’t exactly great news if you sell widgets to customers across one of the ponds.

On the financial front, bank stocks were hammered in European trading overnight. HSBC fell some 8%, Deutsche Bank was down 10% and Commerzbank was off 9% as worries about the credit crunch and debt writedowns resurface into the earnings season. U.S. banks remain in a negative spotlight, with Citigroup Inc. (NYSE:C) selling off brokerage assets to raise cash into earnings and Wells Fargo & Co. (NYSE:WFC) downgraded by analysts. Shortly after the open, Citigroup . . .

Small-cap stocks pulled lower Monday, unable to escape the familiar bearish shadow of rising crude oil prices and slumping financial shares. The Russell 2000 (NYSE:IWM) tumbled 5.92, or 0.82%, to 719.81, the second-lowest daily close since early May.

Small caps were noticeably soft relative to the large-cap Dow, which found comfort from energy-related gains in Exxon Mobil Corp. (NYSE:XOM), which gained about 2.3% to play a supportive role for the Dow 30.

Speaking of energy, crude oil prices climbed about 1% past $136 dollars a barrel, a brazen show of support given the fact that Saudi Arabia pledged to increase production. However, the possibility of more supplies was lapped up amid worker strikes in Nigeria and heightened Middle East tensions following last week’s news that Israel staged a large practice military strike against Iran’s nuclear production facilities.

The U.S. dollar managed to push higher today despite the rally in crude oil prices, gaining about 0.5% against the euro and about 0.4% versus the yen. However, advances in the greenback were trimmed back from better levels seen into the U.S. stock market opening, when soft Eurozone economic data bolstered the buck.

Every new trading day seems to bring with it a new bearish scare for the battered financial sector and today’s fright du jour was a warning from influential analysts at Goldman Sachs that the credit crunch will get a “second wind” and that junk bond defaults will rise more quickly than expected. Goldman also said that regional . . .

Small-cap stocks opened higher, but were unable to sustain the early bid and slipped back slightly into the red as slumping financial stocks and higher crude oil overcame bullish fodders on the merger and acquisition front from a large deal in the agriculture arena. At 10:03 a.m. ET, the Russell 2000 (NYSE:IWM) was down 1.06, or 0.15%, at 724.67.

Bunge Ltd. (NYSE:BG), a giant fertilizer and oilseed processing company, announced plans to purchase Corn Products International (NYSE:CPO) in a deal worth $4.4 billion. BG shares were up in overnight trading, benefiting from news that the company increased its earnings forecast, but turned lower shortly after the regular market open this morning. CPO prices soared some 24% on the news.

Crude oil prices were on the rise heading toward the U.S. stock market opening, climbing despite a pledge from Saudi Arabia to raise production. Tension in the Middle East has been stirred lately by revelations that Israel executed a practice strike on Iran’s nuclear facilities.

Despite the rise in crude oil prices, the dollar was actually on a roll this morning, climbing about 0.7% against the euro following soft economic data out of the Eurozone overnight. The greenback was also up about 0.5% versus the yen.

Financial stocks have been pummeled in recent weeks by investors amid ongoing worries about the credit crunch. Although some stocks in the financial zone might benefit from bargain hunters this week, there were additional analyst downgrades on banks and against home lenders overnight, which could keep that area on . . .

Small-cap stocks are expected to start out the week in the green, underpinned by merger and acquisition news on the agriculture front, and by ideas the market was oversold after Friday’s slide. The Russell 2000 (NYSE:IWM) was up about 0.4% in after-hours trading, which suggests an open near 728.50.

Bunge Ltd. (NYSE:BG) announced a deal to buy Corn Products International (NYSE:CPO) for $4.4 billion, and the news sparked a 2.4% rally in Bunge overnight and a hefty 27% jump in CPO shares.

Despite the good news on the M&A front, there were additional analyst downgrades in the banking and financial sector overnight, which could keep a lid on any recovery move in that downtrodden area. Fannie Mae (NYSE:FNM) and Freddie Mac (NYSE:FRE) could be on the defensive following news that Lehman Bros. analysts raised their loss forecast on the lenders.

In overseas stock market trading, Asia shares were primarily lower, catching up with the declines in U.S. equities from Friday. Japan was down 1.3%, Hong Kong off 0.2%, Taiwan down 1.8%, Australia down 1.4%, South Korea down 0.6% and India . . .

(NYSE:SB)
Priced on May 28
$190 million proceeds
$378.4 million post-money valuation

Safe Bulkers operates a fleet of 11 ships used to carry dry bulk, which is uniform cargo that can be stored in loose piles such as grain or iron ore. To get it from place to place, shippers use dry-bulk ships, and Safe Bulkers is one of the fleet operators they call. The company’s ships have an average age of 2.6 years, making it one of the youngest fleets in the industry. The company’s largest customer is agribusiness company Bunge Limited (NYSE:BG), which contributed 29.9% of 2007 revenues. Another agribusiness firm, Cargill International, represented 21.1% of revenues, and Daiichi Chuo Kisen Kaisha, a shipping company, was responsible for 18.2% of sales. That’s a total of 69.2%, a proverbial blessing and curse. Safe Bulkers has most of its fleet time accounted for, but the loss of one of those customers would be devastating.

Operating the ships uses a lot of capital, but the business makes money. In 2007, Safe Bulkers posted net income of $87.8 million on revenue of $161.1 million. Cash provided by operating activities was $278.5 million. The ships need ongoing maintenance, but they also have value; Safe Bulkers historical financial results often include gains from sales of ships.

The company is owned by Vorini Holdings, an investment firm controlled by the Hajioannou family of Greece. Vorini sold all of the stock in this offering, and will still control more than 80%. The company itself did not get any of the proceeds. Nevertheless, Safe Bulkers has plans to expand its fleet to 19 ships in the next two years. The filing range was $20 to $22, so the $19 price was a little . . .