U.S. Mortgage Applications Down

Arthi Gupta
29 Sep, 2010
New York City

U.S. stocks fell after mortgage refinance applications declined. China manufacturing index rose to a five-month high. Northrop Grumman won $2.6 billion Homeland Security contract and Boeing received contract from the U.S. Navy valued at $5.3 billion.

[R]9:35 AM New York – U.S. stocks fell after mortgage refinance applications declined. China manufacturing index rose to a five-month high. Northrop Grumman won $2.6 billion Homeland Security contract and Boeing received contract from the U.S. Navy valued at $5.3 billion.[/R]

U.S. stocks traded lower and markets in Asia closed mixed and European markets edged lower.

The Mortgage Bankers Association today released its Weekly Mortgage Applications Survey for the week ending September 24. The Market Composite Index, a measure of mortgage loan application volume, decreased 0.8% on a seasonally adjusted basis from one week earlier.

The Refinance Index decreased 1.6% from the previous week, the fourth straight weekly decrease. The seasonally adjusted Purchase Index increased 2.4% from one week earlier.

China''s manufacturing activity picked up to a five-month high in September, according to a survey data released today. Markit Economics said the HSBC manufacturing purchasing managers'' index was at a seasonally adjusted 52.9 in September, up from 51.9 in August.

The Bank of Japan''s quarterly Tankan survey indicated that the large manufacturers'' index of sentiment hit a fresh two-year high in the third quarter of 2010, gaining for the sixth straight quarter posting a score of 8.

Home prices in the U.S. increased at a slower annual rate in July compared to June, according to a report released by Standard and Poor''s on Tuesday. The controversial index that tracks metropolitan homes, S&P/Case-Shiller 20-City Composite Home Price Index increased at an annual rate of 3.2% in July compared to a 4.2% increase in June.

U.S. Conference Board released a report on Tuesday showing that confidence saw a substantial retreat in September due in large part to a notable deterioration in consumer expectations. The Conference Board said its consumer confidence index fell to 48.5 in September from a downwardly revised 53.2 in August.

In another survey, ABC News said that its consumer comfort index averaged -45 in the week ended September 26, up from -46 a week ago. ABC News said only 11% of survey respondents rated the economy positively, while 27% thought it was a good time to spend money and another 45% of respondents rated their personal finances positively.

The International Monetary Fund Managing Director Dominique Strauss-Kahn reportedly said on Tuesday that there is no big risk of a global currency war. According to him, the Chinese yuan is still undervalued.

John Lipsky, First Deputy Managing Director of the International Monetary Fund said in a speech published on the lender''s Web site that global growth recovery will not be as expected in the second half of this year and this sluggishness will persist into early 2011.

The Boeing Company was awarded a new multi-year procurement contract from the U.S. Navy for 124 F/A-18E/F Super Hornet and EA-18G Growler aircraft, valued at $5.297 billion. Boeing will deliver 66 Super Hornets and 58 Growlers to the Navy from 2012 through 2015.

Programs Vice President Kory Mathews commented, ""Procurement of these 124 aircraft through a multi-year contract takes advantage of the full efficiencies of Boeing''s production and supplier operations, which will generate more than $600 million in cost savings for U.S. taxpayers.""

Campbell Soup Company Chief Executive Officer Douglas Conant will step down on July 31, 2011. The company also named Denise Morrison Chief Operating Officer, effective October 1, is expected to succeed Conant as CEO, beginning fiscal year 2012.

British Airways plc signed an agreement to start a transatlantic joint business with American Airlines, a unit of U.S.-based AMR Corp. and Spanish carrier Iberia Lineas Aereas de Espana SA. The business is expected to be worth a combined $7 billion in annual revenues, the company noted.

Nintendo Co. Ltd., the Japan-based company engaged in the leisure machine business lowered its forecast for first-half as well as fiscal 2011 citing stronger-than-expected yen appreciation, current sales performance as well as the sales outlook for the holiday season.

For the first-half, the company estimates a net loss of 2 billion yen or 15.64 yen per share on revenues of 360 billion yen. For fiscal year 2010, the company modified its outlook for net income to 90 billion yen or 703.78 yen per share,

Earnings Review

Actuant Corporation ((ATU)), the manufacturer of a range of industrial products and systems reported fourth quarter sales climbed 19% to $310.36 million, from $261.02 million in the prior-year quarter. Net loss in the quarter was $16.8 million or 22 cents per diluted share, compared to net earnings of $16.5 million or 24 cents per share in the comparable prior-year quarter.

American Greetings Corporation ((AM)), the greeting card company reported second quarter revenue dropped 3.8% to $342.82 million from $356.35 million a year ago. Net income in the quarter plunged 63% to $8.53 million or 21 cents per diluted share compared to net income of $23.12 million or 59 cents per share a year ago.

Family Dollar Stores, Inc. ((FDO)), the discount retail chain operator stated fourth quarter sales gained 8.0% to $1.957 billion, from $1.811 billion for the fourth quarter of fiscal 2009. Sales in comparable stores increased 6.1%. Net income in the quarter increased 23.0% to $74.0 million or 56 cents per diluted share, compared to net income of $60.1 million or 43 cents per share in the fourth quarter of fiscal 2009.

For the first quarter of fiscal 2011, the company estimates that comparable store sales to increase between 5% and 7% and earnings per share between $0.55 and $0.60 per share compared with $0.49 per share in the first quarter of fiscal 2010.

Green Mountain Coffee Roasters Inc. ((GMCR)), the specialty coffee company revealed that its revenue recognition practices and relationship with one of its fulfillment vendors are being probed by the Securities and Exchange Commission.

Hewlett-Packard Company ((HPQ)), the technology company forecast fiscal year 2011 revenue to be in the range of $131.5 billion to $133.5 billion and GAAP earnings of $4.35 to $4.45 per share.

Landec Corporation ((LNDC)), the specialty polymer products maker reported first quarter revenues increased 7% to $64.95 million from $60.94 million in the comparable quarter a year ago. Net income in the quarter improved 5.5% to $2.30 million or 9 cents per diluted share compared to net income of $2.18 million or 8 cents per share last year.

Misonix, Inc. ((MSON)), the developer of minimally invasive ultrasonic medical device products reported fourth quarter revenues soared 43% to $4.3 million from $3.0 million a year ago. Net loss for the fourth quarter was $1.5 million or 20 cents per diluted share, compared to net income of $2.4 million or 35 cents per share for the year-ago quarter.

ModusLink Global Solutions, Inc. ((MLNK)), the technology and venture capital company reported fourth quarter revenue increased 1.3% to $228.1 million from $225.2 million in the year-ago quarter. Net loss in the quarter widened 522% to $25.5 million or 58 cents per diluted share, compared to a net loss of $4.1 million or 9 cents per share in the prior-year quarter.

NAPCO Security Technologies, Inc. ((NSSC)), the diversified manufacturer of security products reported fourth quarter net sales increased 9% to $20.64 million from $18.98 million a year ago. Net loss in the quarter narrowed 80% to $1.89 million or 10 cents per diluted share, compared to a net loss of $9.22 million or 47 cents per share for the same period a year ago.

Net sales for fiscal 2010 declined 3% to $67.76 million, from $69.57 million a year earlier. Net loss for the year ended June 30, 2010 narrowed 51% to $6.5 million or 34 cents per diluted share, compared to a net loss of $13.38 million or 70 cents per share for the same period a year ago.

Sealy Corporation ((ZZ)), the bedding products maker stated third quarter sales declined 0.9% to $346.18 million from $349.57 million last year. Net loss for the quarter was $15.82 million or 16 cents per diluted share, compared to an income of $12.06 million or 5 cents per share in the previous year.

Standard Microsystems Corporation ((SMSC)), the designer of connectivity solutions said second quarter revenues increased 39% to $104.1 million from $75.1 million in the prior-year quarter. Net income generated in the quarter was $12.90 million or 57 cents per diluted share, compared to a net loss of $6.53 million or 30 cents per share in the same quarter a year ago.

Thor Industries, Inc. ((THO)), the recreation and commercial vehicle producer stated fourth quarter sales surged 51% to $663.78 million from $440.92 million last year. Net income in the quarter soared 64% to $40.60 million or 78 cents per diluted share compared with net income of $24.78 million or 45 cents per share a year earlier.