IPO cancellations rise amid swings in stock market
NEW YORK (AP) -- Companies have withdrawn initial public offerings this month at a pace not seen since December 2008. Only four have dared go public during three weeks marked by price swings and more than 10 percent declines in the major stock indexes.
Prior to the recent slowdown in IPOs, many market watchers had predicted this year would be the strongest for public debuts since before the recession began. They expected more than 200 IPOs.
There have been 96 IPOs so far in 2011, according to IPO investing firm Renaissance Capital. Data collector Dealogic said 17 deals have been canceled in August -- either postponed indefinitely or withdrawn completely.
That's the most since December 2008, when companies scrapped 18 deals.
Lowe's to buy back stock
MOORESVILLE, N.C. (AP) -- Lowe's Cos., the nation's second-largest home-improvement retailer, said Monday that it will buy back up to $5 billion of its common stock.
While the repurchase program has no expiration date, the Mooresville, N.C., company said it plans to buy back the full amount over the next two to three years.
Lowe's board also announced that it is declaring a regular quarterly dividend of 14 cents. The dividend will be paid on Nov. 2 to shareholders of record on Oct. 19.
Last week Lowe's reported that its second-quarter net income was nearly flat due to volatile weather and shoppers' worries about the economy.
Lowe's runs more than 1,725 stores in the U.S., Canada and Mexico.
Boomers may lower stocks
Aging baby boomers may hold down U.S. stock values for the next two decades as they sell their investments to finance retirement, according to a paper from the Federal Reserve Bank of San Francisco.
"U.S. equity values have been closely related to demographic trends in the past half-century," adviser Zheng Liu and researcher Mark Spiegel wrote in a paper released by the bank Monday. "In the context of the impending retirement of baby boomers over the next two decades this correlation portends poorly for equity values."
The equity-price-to-earnings ratio of U.S. stocks tripled from 1981 to 2000 as Americans born between 1946 and 1964 reached their peak working ages, Liu and Spiegel said. Overseas investors' demand for U.S. stocks might help mitigate the effect of a baby-boomers' sell-off, yet the impact would probably be limited, they said.
"Foreign demand for U.S. equities is unlikely to offset price declines resulting from a sell-off by U.S. nationals," they said.
Unifrax gets part of business
Unifrax has acquired a portion of a Chinese company's business.
The Niagara Falls-based manufacturer, through its Hong Kong subsidiary, bought the emission control-mat business of Zhejiang Bondlye Motor Environmental Technology. The products are used in automotive catalytic converters.
"The business has an excellent reputation in the Chinese market and is very well positioned with the domestic Chinese automotive [original equipment manufacturers]," said David E. Brooks, Unifrax's president and chief executive officer.
Terms of the deal were not disclosed. The 25 people associated with the business will join the Unifrax China team.
Unifrax makes insulation products used in many high-temperature industrial, automotive and fire-protection applications. It has 21 manufacturing facilities worldwide.
Obama calls Buffett
President Obama called billionaire investor Warren Buffett on Monday to discuss the state of the economy and possible measures that could be taken to spur investment and increase economic growth, Josh Earnest, an administration spokesman, said.
Obama called the chairman and chief executive officer of Berkshire Hathaway Inc., Earnest said. Buffett has served as an informal adviser to the president since his campaign for office. Berkshire owns The Buffalo News, and Buffett is the newspaper's chairman. -- Bloomberg News