U.S. Weekly Jobless Claims Fall; ECB Hikes Rates

Arthi Gupta
07 Jul, 2011
New York City

U.S. indexes futures traded higher after weekly jobless claims fell 14,000. U.S. private sector employment rose more than anticipated and non-manufacturing index declined in June. The European Central Bank lifted key rates to curb inflation.

U.S. Weekly Jobless Claims Fall; ECB Hikes Rates

[R]9:00 AM New York – U.S. indexes futures traded higher after weekly jobless claims fell 14,000. U.S. private sector employment rose more than anticipated and non-manufacturing index declined in June. The European Central Bank lifted key rates to curb inflation.[/R]

U.S. indexes gained after better-than-estimated economic data. Asian markets declined and European indexes traded sideways after the European Central Bank increased its key interest rates on Thursday by 25 basis points to 1.50%, second hike in the year.

The Bank of England left its key interest rate unchanged at 0.5% and maintained the size of the quantitative easing at £200 billion.

U.S. Weekly Jobless Claims Fall

Seasonally adjusted weekly jobless claims in the U.S. decreased 14,000 to 418,000 from the revised previous week claims of 432,000.

The preliminary insured unemployment rate in the week ending June 25 was 2.9% from the prior week''s revised rate of 3.0%.

U.S. Private Sector Employment Rises

Employment in the U.S. private sector increased in the month of June, according to a report released by payroll processor Automatic Data Processing, Inc. on Thursday,

The report showed that private sector employment increased by 157,000 jobs in June following a downwardly revised increase of 36,000 jobs in May.

U.S. Non-Manufacturing Index Down

Economic activity in the U.S. non-manufacturing sector grew in June for the 19th consecutive month, according to a report released by the Institute for Supply Management on Wednesday.

The ISM said its non-manufacturing index fell to 53.3 in June from 54.6 in May, and indicating continued growth at a slower rate in the non-manufacturing sector.

FAO World Food Price Index Up

World food prices increased in June, due mainly to strong rise in global sugar prices, the Food and Agriculture Organization said today.

The FAO food price index advanced 1% from a month earlier to 234 points in June.

Earnings Review

AAR Corp. ((AIR)), the defense contractor reported fourth quarter sales grew 32% to $479.8 million from $364.8 million last year. Net income in the quarter surged 91.3% to $21.42 million or 52 cents per diluted share compared to net income of $11.20 million or 29 cents per share last year.

A. Schulman, Inc. ((SHLM)), the supplier of plastic compounds and resins reported third quarter revenues soared 45.4% to $611.1 million, from $420.3 million in the same quarter last year. Net profit for the quarter fell 27.1% to $18.8 million or 60 cents per diluted share compared with net profit of $25.8 million or 91 cents per share last year.

Catalyst Health Solutions, Inc. ((CHSI)), the full-service pharmacy benefit management company estimates fiscal year 2011 revenue to be in the range of $5.1 billion to $5.3 billion and adjusted earnings for the year to be $2.30 to $2.40 per share.

Costco Wholesale Corporation ((COST)), the membership warehouse operator said net sales for June increased 18% to $8.69 billion from $7.33 billion during the previous year and comparable sales for the five weeks ended July 3 rose 14%, mainly reflecting inflation in gasoline prices and strengthening foreign currencies.

Samsung Electronics Co., Ltd., the South Korean conglomerate estimates second quarter sales to increase 2.9% to 39 trillion won, from the prior-year quarter''s sales of 37.89 trillion won.

The company estimates operating profit for the second quarter to drop 26.2% to 3.7 trillion won compared to the operating profit of 5.01 trillion won a year-ago.

Visa Inc. ((V)), the payment card processing network estimates fiscal year 2011 revenue to grow in the range of 11% to 15% and annual class A common stock earnings per share to grow more than 20%. That implies revenue of $8.95 billion to $9.27 billion and earnings of at least $4.81 per share.