U.S. Weekly Jobless Claims Drop; Productivity Up

Arthi Gupta
02 Jun, 2011
New York City

U.S. indexes gained after weekly jobless claims fell 6,000 to 422,000 and worker productivity increased more than estimated in the first quarter. Marathon Oil acquired Hilcorp

[R]9:40 AM New York – U.S. indexes gained after weekly jobless claims fell 6,000 to 422,000 and worker productivity increased more than estimated in the first quarter. Marathon Oil acquired Hilcorp’s Eagle Ford Shale assets for $3.5 billion. Joy Global lifts fiscal year 2011 outlook.[/R]

U.S. stocks staged a mild rebound after a sharp drop indexes yesterday that dragged world markets. Indexes in Asia declined between 1.2% and 2.3% and in Europe fell more than 1%.

However, the sentiment in Europe recovered after Spain completed the sale of 3.9 billion euros of bonds but at a higher yield than the previous auction.

European indexes faltered after Moody''s downgraded Greece''s local and foreign currency bond ratings deeper into junk status, heightening concerns over Europe''s debt crisis.

The move by the rating agency was widely perceived by investors as too late and investors focused on the details of austerity measures negotiated by Greece and European Union regulators and the IMF.

The ratings agency said there was an increased risk that Greece would fail to stabilize its debt position absent a debt restructuring.

Asian stocks slumped on economic concerns and falling commodity prices.

Japanese Prime Minister Naoto Kan survived the no confidence vote in the Parliament. A no-confidence motion moved by the opposition was defeated in the Parliament on Thursday with 293 members rejecting it, while 152 voted for it.

Japan''s economic recovery is set to accelerate in the second-half of the fiscal year ending March 2012, Bank of Japan policy board member Seiji Nakamura said today.

Private consumption is likely to recover and reconstruction demand to increase further, he told business leaders in Nara, western Japan.

U.S. Weekly Jobless Claims Drop

The U.S. Labor Department released a report on Thursday showing a modest decrease in first-time claims for unemployment benefits in the week ended May 28.

The report showed that initial jobless claims fell 6,000 to 422,000 from the previous week''s revised figure of 428,000.

U.S. Worker Productivity Rises

U.S. worker productivity increased more than initially estimated in the first quarter of 2011 according to data released by the Department of Labor today.

The Labor Department released a report showing that labor productivity in the first quarter was upwardly revised to an increase of 1.8% from the previous estimate of 1.6% increase.

At the same time, the report said the increase in unit labor costs in the first quarter was downwardly revised to a 0.7% increase compared to the previous estimate of a 1% increase.

Polycom Buys HP''s Visual Collaboration Business

Polycom, Inc., the communications solutions provider agreed to acquire the assets of Visual Collaboration business of Hewlett-Packard Co. that includes the Halo Products and Managed Services business.

HP will combine its networking with Polycom to deliver comprehensive communication solutions to its customers. Polycom''s video applications will be made available for HP''s WebOS platform.

Marathon Oil Acquires Hilcorp’s Eagle Ford Shale Assets

Marathon Oil Corporation reached an agreement with Hilcorp Resources Holdings, LP to purchase its assets in the core of the Eagle Ford shale formation in Texas in a transaction valued at $3.5 billion.

Microsoft Previews ''Windows 8''

Microsoft Corp. previewed the upcoming version of its new Windows operation system, internally code-named Windows 8 that focuses on optimization for touch screen hardware, including tablet PCs.

Earnings Review

Copart, Inc. ((CPRT)), the junk car auctioneer said third quarter total service revenues and vehicle sales rose 7% to $236.76 million from $220.35 million in the same quarter last year. Net income in the quarter rose 13% to $50.1 million or 71 cents per diluted share compared to net income of $44.4 million or 52 cents per share for the year-ago quarter.

Costco Wholesale Corp. ((COST)), the membership warehouse operator reported comparable sales for the month of May, including Mexico operations, grew 13%, with 11% rise in U.S. sales and 21% climb in international operations.

For the four weeks ended May 29, net sales climbed 17% to $7.14 billion from $6.09 billion during the similar period last year.

Joy Global Inc. ((JOYG)), the mining equipment manufacturer reported second quarter net sales increased 18.6% to $1.06 billion from $896.22 million in the same quarter last year. Net income for the quarter increased 34% to $161.97 million or $1.52 per share compared to net income of $120.44 million or $1.15 per share reported last year.

Joy Global also raised its guidance for the full year 2011 and said it now expects earnings per share to be in the range of $5.30 to $5.60, up from the prior outlook of $5.10 to $5.40 per share range.

Shanda Interactive Entertainment Ltd. ((SNDA)), the Chinese entertainment media company reported first quarter consolidated net revenues increased 25% to RMB1.63 billion from RMB1.30 billion in the same quarter last year.

Net income in the quarter plunged 61.5% to RMB85.5 million compared to net income of RMB221.9 million in the year-ago quarter. Earnings per ADS declined to RMB1.48 from RMB3.22 in the prior-year quarter.