More Financial News

Fed to buy $600 billion in bonds to spark economy
The Federal Reserve Board of Governors pledged last week to start a multi-billion dollar bond-buying spree intended to provide spark to a sluggish economy.
The Fed said it would buy as much as $600 billion in long-term Treasury Bonds through June 2011, including approximately $75 billion this month, in a strategy called “quantitative easing.”
The Fed’s new move comes because it is disappointed with the slow pace of growth and worried that the high 9.6-percent national rate of unemployment might put enough downward pressure on inflation to tip the economy into deflation.
“Information received since the Federal Open Market Committee met in September confirms that the pace of recovery in output and employment continues to be slow. Household spending is increasing gradually, but remains constrained by high unemployment, modest income growth, lower housing wealth, and tight credit. Business spending on equipment and software is rising, though less rapidly than earlier in the year, while investment in nonresidential structures continues to be weak. Employers remain reluctant to add to payrolls. Housing starts continue to be depressed. Longer-term inflation expectations have remained stable, but measures of underlying inflation have trended lower in recent quarters,” the Fed said in its statement about the decision. “Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. Currently, the unemployment rate is elevated, and measures of underlying inflation are somewhat low, relative to levels that the Committee judges to be consistent, over the longer run, with its dual mandate. Although the Committee anticipates a gradual return to higher levels of resource utilization in a context of price stability, progress toward its objectives has been disappointingly slow. To promote a stronger pace of economic recovery and to help ensure that inflation, over time, is at levels consistent with its mandate, the Committee decided today to expand its holdings of securities.”
To read the Fed’s full statement, click here.

WellPoint reports higher profits

Indianapolis-based WellPoint Inc., which does business in the Badger State as Anthem Blue Cross and Blue Shield of Wisconsin, recently reported third quarter 2010 net income of $739.1 million, or $1.84 per share, up from $730.2 million, or $1.53 per share, in the same period a year ago.
"We are pleased with our third quarter performance, which exceeded our forecast primarily due to higher than anticipated favorable reserve development and disciplined administrative expense control. Membership was stable in the quarter, and we continued to grow our Blue-branded businesses. Blue-branded Commercial and Individual enrollment increased by 53,000 in the quarter and is up 208,000 on a year-to-date basis, indicating that we continue to provide excellent value for our customers in this difficult economy," said Angela Braly, chair, president and chief executive officer of WellPoint.
"As we prepare for 2011, we are projecting another year of strong growth in the National Accounts business. We are also taking actions to further improve our administrative efficiency and effectiveness, while delivering excellent service and a superior customer experience, which is becoming increasingly important as we continue to position our company for success in the changing marketplace.”
"Based on our overall performance, we have increased our year-end 2010 enrollment expectation by 200,000 members, and also raised full-year 2010 guidance for earnings per share to at least $6.60, or at least $6.45 on an adjusted basis," said Wayne DeVeydt, executive vice president and chief financial officer. "We also expect to complete more than $4 billion of share repurchases during 2010, representing a significant return of capital to our shareholders following the sale of NextRx at the end of last year."

Profits rise at MillerCoors
SABMiller plc and Molson Coors Brewing Company recently reported MillerCoors underlying earnings grew at a double-digit rate driven by strong cost management and net pricing, which were offset by soft volumes due to a sluggish U.S. beer market in the third quarter ended Sept. 30.
MillerCoors third quarter underlying net income, excluding special items, increased 36.7 percent to $334 million versus the prior year comparable quarter last year.
In the Premium Light portfolio, both Coors Light and Miller Lite volumes were down low-single digits. Miller Lite trends have continued to stabilize since the launch of the Miller Lite Vortex bottle. MGD 64 declined at a double-digit rate.
"It is still a tough market environment, but we are encouraged by our recent premium light trends and the continued strong momentum of our Tenth and Blake portfolio," said Leo Kiely, chief executive officer, MillerCoors. "We successfully achieved positive net revenue growth for the quarter and we delivered on our commitment to take our synergy and other cost savings to the bottom line. Investing behind innovation on our focus brands was also key to our success this summer."
MillerCoors operates eight major breweries in the United States, including its brewery in Milwaukee, as well as its Leinenkugel’s craft brewery in Chippewa Falls.

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