2:30PM New York – Lyondell Chemical receives a bid for $48 per share.

Lyondell Chemical Company (LYO: chart) has agreed to be acquired for $48 per share or $12.66 billion. The stock traded at high as $46.96 on the news. The Russian immigrant billionaire controlled company, Basell, a joint venture between BASF and Royal Dutch Shell PLC, was acquired by Len Blavatnik, in the year 2005 for 4.4 billion euros. Earlier in the year Mr. Blavatnik reported his stake of 8.3% in the company and disclosed plans to buy the company, lifting the stock 40%.

The commodity chemical companies have soared in values in the last three years tracking the rise in oil prices. Refineries, chemical makers and processors have seen their values skyrocket. General Electric sold its plastic division to Saudi Basic Industries and Huntsman was acquired by private equity group Apollo Management. Mr. Blavatnik controlled companies were leading contenders to acquire both the companies.

India, Korea and Middle Eastern countries are building capacities to process commodity chemicals and are poised to take market share away from the larger companies in the developed economies.

11:30AM New York – Johnson & Johnson stock drops after the earnings release.

Johnson & Johnson (JNJ: chart) reported net income for the second quarter of $3.1 billion, a 9.3% increase from a profit of $2.8 billion from a year ago. The revenue rose 13% to $15.1 billion on recent acquisition of Pfizer consumer health business. The earnings per share jumped to $1.05 from 95 cents a year ago. Consumer products revenue jumped 49% on the recent acquisition. The pharmaceuticals unit, the largest unit, reported sales growth of 5.8% to $6.1 billion. The antipsychotic drug Risperdal and Invega sales increased 10% to $1.14 billion. Revenue at medical devices and diagnostics unit, the third largest unit, rose 5.2% to $5.42 billion. Drug coated stents, Cordis unit sales dropped 20% to $852 million.


10:15AM New York – Early trading in New York retains upward bias on rising earnings from Merrill Lynch, Wells Fargo, and Coca Cola.

Market averages in New York gained after the first thirty minutes of trading. Producer Price Index, a measure of wholesale inflation, declined 0.2% in June after gaining 0.9% in May. Core rate of inflation, gained 0.3%, excluding food and energy, largely on higher automobile less. Prices for food dropped 0.8% and for fuel lost 1.1% but prices for automobile gained 1.4%.

Merrill Lynch (ML: chart) earnings for the second quarter jumped to $2.14 billion from $1.63 billion or earnings per share increased to $2.24 from $1.63. Total revenue gained 19% to $9.73 billion.

Coca Cola (KO: chart) second quarter earnings increased to $1.85 billion from $1.84 billion a year ago. The sales in the quarter rose to 19% $7.73 billion through acquisition in Philippines and a launch of new products in Europe. North American cola volume fell 3%, a decline for the fourth quarter in a row. Non-carbonated drinks volume gained 10% on steady sales of Powerade and Zero. World-wide volume sales jumped 4.2% powered by 9% rise in Latin America.

Wells Fargo & Co (WFC: chart) second quarter earnings jumped to $2.28 billion from $2.09 billion a year ago on 13% rise in revenue. The higher fees from credit card and commercial lending helped the bank to declare increasing profits. Banks have managed to increase fees by charging a variety of fees to individual accounts from using ATM cards to managing check books. Commercial loans increased 11% in the quarter and a charge for uncollectible loans fell to 0.87% from 0.9% a year ago.


9:30AM London is lower in morning trade Tuesday on broker downgrades.

The benchmark FTSE 100 Index lost 40.30, or 0.6%, to 6657.40 in London in morning session.

Economic news

Government figures revealed that the annual rate of consumer price inflation fell to 2.4% in June from 2.5% in May, a smaller decline than had been expected. The core CPI annual rate, which excludes energy, food, alcohol and tobacco prices, advanced from 1.9% to 2%, its highest level for 10 years and raised fears of further interest rate hikes.

Advancers of the Day

Some utility stocks gained on positive comment. Northumbrian Water Group rose 1.4 % and Severn Trent added 0.2%. UBS raised its recommendation for both Northumbrian Water and Severn Trent to buy from neutral.

Tate & Lyle rallied 3.9% after Goldman Sachs boosted its recommendation for maker of the sweetener Splenda to buy from neutral.