U.S. Trade Deficit Narrows, Import Prices Rise; Alcoa Swings to Profit

Arthi Gupta
12 Apr, 2011
New York City

U.S. indexes fell after Japanese authorities raised the nuclear disaster level at the Fukushima Daiichi nuclear plant to the highest level. The U.S. trade deficit narrowed to $45.8 billion and import prices soared on higher fuel prices. Alcoa swung to profit but sales were lower than expected.

[R]9:45 AM New York – U.S. indexes fell after Japanese authorities raised the nuclear disaster level at the Fukushima Daiichi nuclear plant to the highest level. The U.S. trade deficit narrowed to $45.8 billion and import prices soared on higher fuel prices. Alcoa swung to profit but sales were lower than expected.[/R]

World markets plummeted after the Japanese nuclear energy department raised the severity of the nuclear threats to a rating of seven from five, same as the Chernobyl nuclear disaster in 1986.

The decision was taken on the basis of radiation of 10,000 terabequerels per hour estimated at Fukushima, according to public broadcaster NHK.

The world economy is forecast to expand nearly 4.5% in both 2011 and 2012, after expanding 5% last year, the International Monetary Fund said in its April 2011 World Economic Outlook released on Monday.

The projections for 2011 and 2012 were unrevised from January estimates.

The 2011 growth forecast for United States was lowered to 2.8% from 3% while the projection for 2012 was raised to 2.9% from 2.7%.

The International Energy Agency in its monthly Oil Market Report released today, holds its 2011 global oil product demand growth at 1.4 million barrels per day.

On the supply said, the agency said global oil supply fell 0.7 mbd to 88.3 mbd in March on reduced Libyan crude supply, after rising to an all-time high of 89 mbd in February, up 0.2 mbd from January.

U.S. Import Prices Soar

The U.S. Labor Department said import prices surged 2.7% in March following a 1.4% increase in February, with prices for fuel imports showing a substantial increase. The increase marked the fastest rate of import price growth in almost two years.

Export prices rose 1.5% in March after rising 1.4% in February.

U.S. Trade Deficit Narrows

The U.S. trade deficit narrowed somewhat in February, as imports decreased at a faster rate than exports, according to the Department of Commerce on Tuesday.

The report showed that the trade deficit narrowed to $45.8 billion in February from a revised $47 billion in January. Economists had expected the deficit to narrow to $44 billion from the $46.3 billion originally reported for the previous month.

Earnings Review

Alcoa Inc. ((AA)), the aluminum producer said first quarter profit sales rose 22% to $5.96 billion from $4.89 billion in the same quarter last year. Net income generated in the quarter was $308 million or 27 cents per diluted share compared to a net loss of $201 million or 20 cents per share for the year-ago quarter.

Chevron Corporation ((CVX)), the second largest U.S. oil company said that it expects profit for the first quarter to be higher than the previous quarter, due to higher crude oil prices.

Fastenal Co. ((FAST)), the industrial and construction supplies provider reported first quarter net sales increased 23% to $640.58 million from $520.77 million in the same quarter last year. Net earnings in the quarter surged 42% to $79.55 million or 54 cents per diluted share compared to net earnings of $56.03 million or 38 cents per share in the prior-year quarter.

Micrel, Incorporated ((MCRL)), the digital integrated circuit maker said first earnings per share are estimated in the range of $0.13 to $0.14 compared with the prior guidance of $0.17 to $0.19.

WMS Industries Inc. ((WMS)), the gaming machine maker said revenues for the third quarter are expected in the range of $191 million to $193 million, down from its prior outlook of $209 million to $215 million.