U.S. Stocks Rise Amid ECB's $161 Billion Loan to Banks and Mixed Economic Indicators

Strategic Insights -

As the global economic recovery remains a topic of concern, the European Central Bank (ECB) stepped in to alleviate credit issues by lending 131.9 billion euros ($161 billion) to banks for three months. Meanwhile, U.S. stocks advanced on the back of this move, while Asian markets traded sideways amidst ongoing worries about the global economic recovery. In a separate development, a strong ADP report showed that the private sector added 13,000 jobs in June, marking the fifth consecutive monthly increase.

Key Takeaways:

  • The European Central Bank (ECB) lent 131.9 billion euros ($161 billion) to banks for three months, with 171 institutions subscribing at a flat rate of 1%.
  • The Automatic Data Processing (ADP) report revealed that private sector employment increased by 13,000 jobs in June, following an upwardly revised increase of 57,000 jobs in May.
  • The 13,000 job increase in June marked the fifth consecutive monthly increase in private employment, with an average gain of 34,000 jobs per month over the past five months.
  • The increase in private employment in June was less than expected by the ADP report.
  • Celgene Corp. agreed to acquire Abraxis BioScience Inc. in a deal valued at approximately $2.9 billion, net of cash.
  • Sanofi-Aventis SA agreed to acquire U.S.-based TargeGen Inc. for $560 million.
  • The acquisition of Abraxis BioScience is expected to close in the fourth quarter of 2010.
  • Hurricane Alex has disrupted BP Plc's oil clean-up efforts in the Gulf of Mexico, with strong winds and high waves forcing the company to suspend activities such as skimming and dispersant flights.

Statistics:

  • $161 billion: the amount EUR 131.9 billion is equivalent to in U.S. dollars according to the exchange rate at the time of the announcement.
  • 13,000: the number of jobs added in the private sector in June, according to the ADP report.
  • 171: the number of institutions that subscribed to the ECB's three-month refinancing operation.
  • 1%: the flat rate at which the refinancing operation was conducted.
  • 34,000: the average monthly gain in private employment over the past five months.
  • $2.9 billion: the approximate value of the Celgene Corp. acquisition of Abraxis BioScience Inc., net of cash.
  • 560 million: the amount of the Sanofi-Aventis SA acquisition of TargeGen Inc.

Sources:

  • European Central Bank (ECB)
  • Automatic Data Processing, Inc. (ADP)
  • Celgene Corp.
  • Sanofi-Aventis SA
  • Euclid Infotech Pvt. Ltd.