U.S. Jobless Claims Drop 5,000; Durable Orders Decline 0.9%

Arthi Gupta
24 Mar, 2011
New York City

U.S. indexes fell after weekly jobless claims fell 5,000 to 382,000 and durable goods orders declined more than estimated in February. Nordstrom purchased HauteLook for $180 million. Walgreen agreed to acquire drugstore.com for about $409 million.

[R]9:35 AM New York – U.S. indexes fell after weekly jobless claims fell 5,000 to 382,000 and durable goods orders declined more than estimated in February. Nordstrom purchased HauteLook for $180 million. Walgreen agreed to acquire drugstore.com for about $409 million.[/R]

Asian markets gained as Japan looks to reconstruct and the European indexes soared ahead of the European leaders meeting in Brussels today.

The two-day summit meeting is to formulate a “comprehensive response” to the sovereign debt crisis in the euro-zone.

U.S. Weekly Jobless Claims Fall

Seasonally adjusted weekly jobless claims decreased 5,000 to 382,000 from the revised previous week revised claims of 387,000 with claims remaining below the key 400,000 level.

The preliminary insured unemployment rate in the week ending March 12 was unchanged from the prior week''s unrevised rate of 3.0%.

U.S. Durable Goods Orders Decline

The U.S. Commerce Department released a report showing that durable goods orders fell by 0.9% in February following an upwardly revised 3.6% increase in January, with the decrease in large part to a steep drop in orders for machinery.

Bernanke Assures Banking Reforms Beneficial

Federal Reserve Chairman Ben Bernanke told the Independent Community Bankers of America National Convention in San Diego that community bankers will benefit from the Dodd-Frank Act, as the banking reform creates a more level playing field for financial institutions of all sizes.

AIG Envisages Minimal Impact from Japan Quake Claims

American International Group, Inc said potential loss impact on its Japanese general insurance operations Fuji Fire and Marine Insurance Co., Ltd. from earthquake-related claims could be minimal due to its existing 39.5 billion yen or about $482 million catastrophe reserve liability with JERC.

Toyota Forecasts Production Delays

Toyota Motor Corp. said that some production interruptions at its plants in North America were likely due to disruptions in the supply of vehicle parts following the devastating earthquake and tsunami in Japan.

The company was also able to limit the immediate impact from the disaster as it continued to receive parts from Japan ""that were already in the pipeline.""

Nordstrom Purchases HauteLook

Nordstrom Inc. said it closed its acquisition of HauteLook Inc., an online private sale marketplace for $180 million in Nordstrom stock with a portion subject to ongoing vesting requirements.

The acquisition will enable Nordstrom to participate in the fast-growing private sale marketplace and provide a platform to increase innovation and speed in the way it serves customers in all channels.

Walgreen Acquires Drugstore.com

Walgreen Co. agreed to acquire online retailer drugstore.com, inc. for a total enterprise value of about $409 million.

Under the terms of the merger agreement, drugstore.com stockholders will receive $3.80 in cash for each share of stock, which represents an equity value of around $429 million.

Earnings Review

H.B. Fuller Company ((FUL)), the specialty chemicals company said first quarter revenue rose 9.7% to $339.5 million from $309.4 million last year. Net income in the quarter dropped 24.2% to $14.4 million or 29 cents per diluted share compared to net income of $19.0 million or 38 cents per share in the year-ago quarter.

Micron Technology, Inc. ((MU)), the semiconductor company reported second quarter net sales rose 15.3% to $2.26 billion from $1.96 billion a year ago.

Net income in the quarter plunged 80% to $72 million or 7 cents per diluted share compared to net income of $365 million or 39 cents per share in the previous year.

Paychex Inc. ((PAYX)), the staffing and outsourcing service provider said third quarter total revenue increased 5% to $531.3 million from $507.8 million in the same quarter last year.

Net income in the quarter advanced 16.6% to $130.6 million or 36 cents per diluted share compared to net income of $112.0 million or 31 cents per share in the prior-year quarter.

Red Hat, Inc. ((RHT)), the world''s largest seller of Linux software said fourth quarter total revenue rose 25% to $244.80 million from $195.87 million in the same quarter last year.

Net income in the quarter climbed 43.2% to $33.5 million or 17 cents per diluted share compared to net income of $23.4 million or 12 cents per share for the year-ago quarter.

SAIC, Inc. ((SAI)), the provider of engineering and other services to the U.S. Defense and Homeland Security departments said fourth quarter revenues edged up 3% to $2.77 billion from $2.68 billion last year.

Net income in the quarter increased 7.3% to $132 million or 36 cents per diluted share compared to net income of $123 million or 31 cents per share in the prior-year quarter.