U.S. Stocks Follow Lower Oil, Silver; Cisco Falls on Outlook

Bikram Pandey
12 May, 2011
New York City

U.S. stocks declined after commodities extended losses for the second day in a row. U.S. weekly jobless claims declined 44,000 and producer price index increased 0.8%. Retail sales in April increased 0.5%. Cisco reported lower third quarter earnings and guided cautious fourth quarter.

[R]10:50 AM New York – U.S. stocks declined after commodities extended losses for the second day in a row. U.S. weekly jobless claims declined 44,000 and producer price index increased 0.8%. Retail sales in April increased 0.5%. Cisco reported lower third quarter earnings and guided cautious fourth quarter.[/R]

U.S. stocks traded lower after commodities extended losses for the second day. Silver extended dropped more than 6% for the second day in a row and crude oil fell 2.5% and dropped 15% in the month so far.

China increased bank reserve requirements after industrial production growth declined in April to 13.4% from 14.8% in March partly on power shortages.

Seasonally adjusted U.S. weekly jobless claims decreased 44,000 to 434,000 from the revised previous week revised claims of 478,000. The preliminary insured unemployment rate in the week ending April 30 was unchanged from the prior week''s unrevised rate of 3%.

The Producer Price Index increased 0.8% in April on a seasonally adjusted basis after gaining at 0.7% rate in March and 1.6% in February. On unadjusted basis prices of finished goods increased 6.8%.

Retail sales adjusted for seasonality and calendar rose 0.5% to $389.4 billion from March and up 7.6% from a year ago. February to March revised retail sales rose 0.4%.

European Markets Decline on Commodities Fall

European markets traded lower after resources and commodities linked companies led the decliners. Miners, and energy related companies fell in London, Frankfurt and Paris. Industrial output in the euro-zone fell in March.

Industrial output in 17-nations euro zone fell 0.2% and 0.3% in the wider zone of EU 27 from previous month and rose 5.3% in the euro area and 4.6% in the EU 27 from a year ago.

The International Energy Agency today cut its 2011 outlook for oil demand helping the crude oil futures by 2.8% to $95.47 a barrel.

Total UK production output in March rose 0.7% from a year ago. Output in mining decreased 10.7% and energy increased 1.6%. Manufacturing output surged 2.7% in February from a year ago month.

U.S. Stocks Movers

BCE Inc. ((BCE)), the Canada based telecom operator reported first quarter revenues rose 0.7% to $4.47 billion compared to $4.43 billion in the same period last year. Net earnings in the quarter declined 28.7% to $503 million or 67 cents per diluted share compared to $706 million or 92 cents per share a year ago.

Cisco Systems, Inc. ((CSCO)) declined 5.2% or 93 cents to $16.85 after the Internet protocol based network product provider reported third quarter revenues increased 5% to $10.9 billion compared to $10.4 billion in the same period last year.

Net income in the quarter declined 17.8% to $1.8 billion or 33 cents per diluted share compared to $2.2 billion or 37 cents per share a year ago. The company also plans to lay off and no longer offered its annual sales growth target between 12% and 17%.

Kohl’s Corporation ((KSS)), the department store operator reported fourth quarter net sales rose to $4.2 billion compared to $4.0 billion in the same period last year. Comparable store sales for the quarter increased 1.3%. Net income in the quarter grew 5.1% to $211 million or 73 cents per diluted share compared to $199 million or 64 cents per share a year ago.

Precision Castparts Corp. ((PCP)), the complex metal components and product maker reported fourth quarter total revenues soared 16.8% to $1.7 billion compared to $1.4 million in the same period last year. Net income in the quarter rose to $271.0 million or $1.87 per diluted share compared to $241.2 million or $1.69 per share a year ago.

Pacific Ethanol, Inc. ((PEIX)) soared 25% or 9 cents to 48 cents after the low carbon renewable fuels producer first quarter net sales rose to $173.1 million compared to $71.3 million in the same period last year. Net loss in the quarter narrowed to $0.3 million or break even cents per diluted share compared to $11.7 million or 20 cents per share a year ago.