U.S. Jobless Claims Fall, Retail Sales Up; JPMorgan Net Rises 13%

Arthi Gupta
14 Jul, 2011
New York City

U.S. indexes edged higher after weekly jobless claims fell 22,000, retail sales rose 0.1% and producer prices slid 0.4% in June. U.S. business inventories rose more than estimated in May. JPMorgan net rose 13% on significantly lower provision for credit losses.

[R]11:30 AM New York – U.S. indexes edged higher after weekly jobless claims fell 22,000, retail sales rose 0.1% and producer prices slid 0.4% in June. U.S. business inventories rose more than estimated in May. JPMorgan net rose 13% on significantly lower provision for credit losses.[/R]

U.S. indexes rose after better-than-estimated economic data and positive comments from the Fed Chief lifted investor sentiment.

Fed Chairman Ben Bernanke told lawmakers on the second day of Congressional testimony that if the U.S. economic recovery does not pick up the coming quarters, the Fed is prepared to offer additional support beyond the record-low interest rates already in place.

Moody''s Investor Service on Wednesday placed the United States'' triple-A rating on a downgrade watch as the lawmakers struggles to negotiate a debt deal.

European indexes declined after Fitch Ratings on Wednesday downgraded Greece''s credit ratings by three notches to ''CCC'' from its previous rating of ''B+''.

The ratings agency cited the absence of a new, fully-funded and credible EU-IMF program and heightened uncertainty surrounding the role of private creditors in any future funding as well as the country''s weakening macroeconomic outlook.

Asian markets edged lower on global economic concerns.

U.S. Weekly Jobless Claims Fall

Seasonally adjusted weekly jobless claims for the U.S. decreased 22,000 to 405,000 from the revised previous week claims of 427,000. However, jobless claims remained above the key 400,000 level for the fourteenth consecutive week.

The preliminary insured unemployment rate in the week ending July 2 was 3% unchanged from the prior week''s revised rate of 3%.

U.S. Retail Sales Up

U.S. retail sales adjusted for seasonality and calendar rose 0.1% to $387.8 billion from May and up 8.1% from a year ago. April to May revised retail sales fell 0.1%.

U.S. PPI Drops

The U.S. Producer Price Index decreased 0.4% in June on a seasonally adjusted basis after gaining at 0.2% rate in May and 0.8% in April, according to a report published by the U.S. Labor Department today. On unadjusted basis, prices of finished goods increased 7.0%.

U.S. Business Inventories Rise

U.S. businesses inventories increased 1% to $1.51 trillion in May, after rising by an upwardly revised 1% percent in April, according to data released by the U.S. Department of Commerce today.

Williams Revises Bid Offer

Williams Companies, Inc. said it submitted an enhanced proposal to buy Southern Union Co. for $44.00 per share in cash, for a total enterprise value of $9.4 billion.

Williams'' enhanced proposal represents a premium of 10% over the nominal purchase price in Southern Union''s recently revised agreement with Energy Transfer Equity, L.P. announced on July 5, 2011.

The Williams proposal also represents a premium of 56% over Southern Union''s closing share price of $28.26 on June 15, 2011.

ConocoPhillips Plans Split

ConocoPhillips’ board of directors approved the separation of the company’s Refining & Marketing and Exploration & Production businesses into two stand-alone, publicly traded corporations via a tax-free spin of the refining and marketing business to ConocoPhillips shareholders.

Following the completion of the proposed separation, ConocoPhillips will be a large and geographically diverse pure-play exploration and production company with strong returns and investment opportunities.

Earnings Review

Fairchild Semiconductor International, Inc. ((FCS)), a supplier of semiconductor solutions for power and mobile products said second quarter total revenues grew 6% to $433.2 million from $409.6 million in the same quarter last year. Net income in the quarter increased 2.5% to $44.9 million from $43.8 million in the previous year. On a per share basis, earnings were $0.34, flat with last year, on higher share count.

JPMorgan Chase & Co. ((JPM)), the financial services firm stated second quarter on a managed basis, improved 7% to $27.41 billion from $25.61 billion in the comparable period. Net income for the quarter grew 13% to $5.43 billion or $1.27 per diluted share compared to net income of $4.80 billion or $1.09 per share last year.

The Progressive Corporation ((PGR)), the auto insurance group reported third quarter net income grew 15.7% to $245.2 million or 38 cents per diluted share compared to net income of $211.9 million or 32 cents per share a year ago.

Net premiums written for the quarter rose 3% to $3.84 billion, and net premiums earned increased 4% to $3.72 billion.