U.S. Stocks Higher on Earnings; Record Foreclosures, Bernanke Lessons

Bikram Pandey
17 Feb, 2011
New York City

U.S. stocks traded higher as earnings optimism drove sentiment. Cliffs Natural Resources, Lexmark, Express Scripts, Nvidia and CBS Corp reported higher earnings. U.S. mortgage loans in foreclosure increased to 4.63% and nearly one in seven loans are either in default or late in payment.

[R]4:00 PM New York – U.S. stocks traded higher as earnings optimism drove sentiment. Cliffs Natural Resources, Lexmark, Express Scripts and CBS Corp reported higher earnings. U.S. mortgage loans in foreclosure increased to 4.63% and nearly one in seven loans are either in default or late in payment.[/R]

U.S. indexes gained after weekly jobless claims rose 25,000 and January inflation increased 0.4%.

U.S. mortgage loans in foreclosure increase to 4.63% of all loans in the fourth quarter from 4.39% in the previous quarter, according to the Mortgage Bankers Association.

Nearly one in seven mortgage holder is in default across the nation and Florida led the nation with 24% of all borrowers either in default or at least one payment behind. More than 14% of all loans in Florida were in foreclosure at the end of December.

Nearly 12.9% of mortgage borrowers were 30 days or more past due or in foreclosure at the end of December, lower than 14% from a year ago but ahead of 11% from two years ago. Approximately six million households are in default.

Fed Chairman told members of Senate Finance Committee that the central bank is implementing lessons learned from the financial crisis that began in 2007. In an exchange with lawmakers, Chairman said regulators have begun to implement several rules and studies for the Dodd-Frank Act.

Chairman Bernanke also said that the central bank learned the lessons from the latest financial crisis and should be more aggressive when it comes to systemic risk evaluation and if banks are taking enough steps in managing risks.

Also chairmen of the SEC, the FDIC and the CFTC said that more financial, human and technology resources will be needed to monitor new rules designed under the Dodd-Frank Act.

Aveo formed joint venture with Astellas worth $1.3 billion. Williams Companies plans to spilt into two. Chesapeake completed $570 million project cooperation deal with CNOOC.

ABB fourth quarter net income surged 30% to $700 million. Cablevision fourth quarter net income soared to $113.8 million. Comcast net income in the quarter decreased to $955 million. Morningstar fourth quarter net income rose to $27.4 million.

The European indexes traded sideways after euro-zone current account deficit widened and construction output fell in December. German employment exceeded 41 million. Nestlé fiscal year net tripled. ABB Ltd quarterly net rose 30%. BNP Paribas net rose 14%.

The UK indexes slid after weak economic data from the U.S. The UK government and the BoE formed committee for better regulation of banking system. The BoE policy maker Sentance warned of inflationary pressures. The UK manufacturers estimated output to grow strongly. Rolls-Royce secured two contracts valued at $246 million.

Stocks in Japan inched higher as foreign investors continue to increase their net exposure. More than 1,000 companies in the first section of Tokyo Stock Exchange are expected to increase earnings by 40% in the current fiscal year. Improved global sentiment lifted Nikkei index.

Stocks in Shanghai closed higher on earnings expectations and hopes of global economic recovery. Property developers declined after Beijing municipal government. Steelmakers gained after companies passed on higher steel prices.

Stocks in Mumbai closed higher tacking gains in Asian markets and rising earnings outlook. More than 2,000 companies have released third quarter earnings with average increase of 19%. Reliance Industries plans to invest $30 billion in the next five years in five business units from energy to retail to telecom.

Stocks in Australia traded higher and the Australian dollar inched up. Qantas first-half net soared four-fold on 10% increase in revenues in the first-half. Wesfarmers net rose nearly 25%. Lend Lease first-half net increased 10% on sales decline of 22%. Santos net increased 15%.

Commodities, Bonds and Currencies

Yield on 10-year bond decreased at 3.57% and on 30-year bond rose at 4.68%.

The U.S. dollar decreased to $1.3605 to a euro and rose against the Japanese yen to 83.26 yen.

Immediate futures prices of Texas crude oil increased $1.24 to $86.26 a barrel, for natural gas fell 0.03 cents to $3.85 per mbtu and gasoline prices decreased 0.56 cents to 253.91 cents a gallon.

In metals trading, copper prices increased 2.15 cents to $4.50 per pound, gold increased $9.30 to $1,384.40 per ounce and silver rose 86 cents to $31.49.