U.S. Jobless Claims, PPI, Trade Deficit Rise

Arthi Gupta
14 Oct, 2010
New York City

U.S. stocks traded sideways after weekly jobless claims rose 13,000 to 462,000 and PPI edged higher and trade deficit widened more than anticipated in September. AOL and private equity firms contemplating bid for Yahoo. Tesla signed $60 million deal with Toyota to develop electric powertrain system.

[R]9:35 AM New York – U.S. stocks traded sideways after weekly jobless claims rose 13,000 to 462,000 and PPI edged higher and trade deficit widened more than anticipated in September. AOL and private equity firms contemplating bid for Yahoo. Tesla signed $60 million deal with Toyota to develop electric powertrain system.[/R]

Asian markets surged tracking the gains in New York and Europe. Indexes in Japan, Australia and Hong Kong led the region but the benchmark index in India gave back half the gains of yesterday.

Lockheed Martin agreed to sell EIG business to Veritas Capital for $815 million.

The U.S. Labor Department said weekly jobless claims for the week ended October 9 rose 13,000 to a seasonally adjusted 462,000 from the revised previous week claims of 449,000. The preliminary insured unemployment rate in the week ending October 2 fell to 3.5% from the prior week''s revised rate of 3.6%.

According to a report released by the U.S. Labor Department today, producer prices increased by more than expected in the month of September, with the price growth largely due to a substantial jump in food prices. The Labor Department said its producer price index rose 0.4% in September, matching the increase in August.

Excluding the rise in food prices as well as a moderate increase in energy prices, the core producer price index edged higher 0.1% in September.

The U.S. Commerce Department released a report today showing that the trade deficit for August widened with imports increasing at a much faster rate than the exports. The report showed that the trade deficit widened to $46.3 billion in August from a revised $42.6 billion in July.

The U.S. foreclosure filings grew 1% annually in September and increased 3% sequentially, according to RealtyTrac. In the third quarter, foreclosure filings dipped 1% from last year, although rising 4% from the previous quarter.

Releasing its U.S. Foreclosure Market Report for the third quarter, the default data provider said foreclosure filings, which include default notices, scheduled auctions and bank repossessions, were reported on 930,437 properties in the third quarter, with one in every 139 U.S. housing units receiving a foreclosure filing during the quarter.

The U.S. Treasury Secretary Timothy Geithner said a national moratorium on foreclosure sales might further depress housing prices. Geithner argues that certain banks should temporarily suspend the foreclosure process to prevent more injustices, rather than a government imposed moratorium.

Singapore''s central bank unexpectedly widened the trading band for the Singapore dollar last night to control inflation. It comes after official figures showed the economy registered double-digit growth in the September quarter.

Lockheed Martin Corp., the defense contractor agreed to sell its Enterprise Integration Group to private equity firm Veritas Capital for $815 million in cash.

AOL Inc., the Web service company and several private equity firms are exploring an offer to buy Internet search engine Yahoo Inc., the Wall Street Journal reported on Wednesday, citing people familiar with the matter.

According to the report, Silver Lake Partners and Blackstone Group LP have expressed interest in partnering with AOL to buy Yahoo.

Tesla Motors, Inc., the electric car maker said that under a deal with automaker Toyota Motor Corp., it will develop an electric power train system for the electric version of Toyota''s sports utility vehicle, RAV4. Tesla said it will receive about $60 million from Toyota for the development services.

General Motors Corp., the automaker is expected to price its IPO between $20 and $25 per share and could raise about $15 billion to $20 billion, according to reports quoting GM Chairman Ed Whitacre. The offering is expected to be priced in November.

Broadcom Corp., a provider of semiconductors for wired and wireless communications announced a deal to acquire Beceem Communications Inc., a privately-held provider of fourth generation wireless platform solutions, for approximately $316 million.

Man Group plc, the hedge fund manager completed the acquisition of GLG Partners, Inc. for $1.6 billion to create an alternative investment manager with around $63 billion of funds under management. Man Group said GLG is now its wholly owned subsidiary.

Earnings Review

Apollo Group, Inc. ((APOL)), the private education provider said fourth quarter net revenues rose 17.4% to $1.26 billion from $1.07 billion in the same quarter last year. Net income in the quarter fell 55% to $41.0 million or 28 cents per diluted share, compared to net income of $91.5 million or 59 cents per share for the year-ago quarter.

For the fiscal year 2010, net revenue increased 24.6% to $4.93 billion from $3.95 billion last year. The company reported net income for the fiscal year 2010 declined 8% to $553.0 million or $3.62 per share, compared to $598.3 million or $3.75 per share for the fiscal year 2009.

Bank of the Ozarks, Inc. ((OZRK)), the bank holding company reported third quarter net interest income increased 12.1% to $32.8 million from $29.2 million a year ago. Net income in the quarter soared 140% to $20.2 million or $1.19 per diluted share, compared to net income of $8.4 million or 50 cents per share for the year-ago quarter.

Everest Re Group, Ltd. ((RE)), the insurance and reinsurance company said it expects third quarter net income, including net realized capital gains and losses, to be in the range of $2.95 to $3.20 per share.

Fairchild Semiconductor International ((FCS)), the semiconductor company said third quarter sales soared 25 % to $414.4 million, from $331.8 million in the comparable period. Net income in the quarter surged 1,226% to $35.8 million or 28 cents per diluted share, compared to net income of $2.7 million or 2 cents per share a year ago.

Landstar System, Inc. ((LSTR)), the provider of freight transportation services and supply chain solutions reported third quarter revenues increased 24.3% to $622.83 million, from $500.67 million in the prior-year quarter. Net income in the quarter advanced 8.5% to $21.8 million or 44 cents per diluted share, compared with net income of $20.1 million or 39 cents per share in the year-ago quarter.

Spansion Inc. ((CODE)), the semiconductor company raised its adjusted earnings outlook for the third quarter and tightened its adjusted sales guidance range. The company now estimates GAAP loss of $0.90 to $1.15 per share and net sales are expected in the range of $300 million to $310 million for the third quarter.

Spartan Stores, Inc. ((SPTN)), the grocery distributor and retailer reported second quarter net sales declined 1.3% to $602.05 million from $610.22 million in the comparable quarter last year. Net earnings in the quarter rose 7.7% to $11.2 million or 50 cents per diluted share, compared to net income of $10.4 million or 46 cents per share in the same quarter last year.

Syngenta AG ((SYT)), the agribusiness company stated third quarter sales rose 10% to $2.2 billion from $2.0 billion a year ago. Total seeds sales also increased 8.9% to $442 million from $406 million a year ago.

Universal Forest Products, Inc. ((UFPI)), the manufacturer and distributor of wood products reported third quarter net sales rose 5% to $480.6 million, from net sales of $457.8 million in the same period of 2009. Net income in the quarter plunged 74% to $2.6 million or 13 cents per diluted share, compared to net income of $10.1 million or 51 cents per share in the same period last year.

Winnebago Industries, Inc. ((WGO)), the manufacturer of motor homes fourth quarter revenues soared 107.1% to $123.12 million, versus $59.46 million for the fourth quarter of fiscal 2009. Net income generated in the quarter was $4.89 million or 17 cents per diluted share versus a net loss of $50.23 million or $1.73 per share last year.