U.S. Private Jobs Rise; Mortgage Applications Drop

Arthi Gupta
31 Aug, 2011
New York City

The U.S. indexes traded higher and the private sector employment rose in August but mortgage and refinancing activity fell. Carl Icahn agreed to sell his stake in Lions Gate Entertainment. AT&T proposed to bring back 5,000 jobs as a condition of T Mobile merger approval.

[R]10:25 AM New York – The U.S. indexes traded higher and the private sector employment rose in August but mortgage and refinancing activity fell. Carl Icahn agreed to sell his stake in Lions Gate Entertainment. AT&T proposed to bring back 5,000 jobs as a condition of T Mobile merger approval.[/R]

U.S indexes gained despite lower than estimated private job additions in August and European and Asian markets traded higher.

The German Cabinet approved measures to improve the European Financial Stability Facility during a meeting in Berlin today.

The measures were agreed at a European leaders'' summit held on July 21 and include a proposal to expand the capacity of the EFSF to €780 billion from the current €440 billion. The German parliament is due to vote on the measures on Sept 29.

The euro area jobless rate remained unchanged at 10% in July and inflation was steady at 2.5% in August, according to data released by Eurostat today.

U.S. Private Sector Employment Rises

Employment in U.S. private sector rose in August, according to a report released by payroll processor Automatic Data Processing on Wednesday.

The report said that private sector employment rose by 91,000 jobs in August following a downwardly revised increase of 109,000 jobs in July.

U.S. Mortgage Applications Drop

U.S. mortgage applications fell sharply last week, even as 30-year interest rates eased, according to industry data released today.

The Mortgage Bankers Association''s said its seasonally adjusted index of mortgage application activity declined 9.6% in the week ended August 26. Mortgage applications fell 2.4% the week before.

Refinancing applications dropped 12.2% last week, and loan requests for home purchases edged higher 0.9%.

Fixed 30-year mortgage rates averaged 4.32%, down from 4.39% the week before.

Carl Icahn to Sell Stake in Lions Gate Entertainment

Lions Gate Entertainment Corp. said billionaire investor Carl Icahn agreed to sell his stake in the company for $7 per share.

Under the terms of the agreement, Carl Icahn and his son Brett Icahn have agreed to sell up to 44.2 million Lions Gate common share, representing substantially all of the Lions Gate shares currently owned by the Icahns.

Also, both the parties have also agreed to dismiss all outstanding litigation between them.

AT&T Awaits Regulatory Approval

AT&T Inc., the largest telecom operator vowed to bring 5,000 wireless call-center jobs it has outsourced abroad back to the U.S. if its proposed $39 billion deal to buy Deutsche Telekom AG''s T-Mobile USA is approved by regulators.

AT&T and T-Mobile have over 25,000 call-center jobs in the United States.

Exxon, Rosneft Ink Deal

Exxon Mobil Corp. and Russian state-run oil company OAO Rosneft signed a strategic cooperation agreement for joint development of Russia''s offshore Arctic and Black Sea resources. The agreement includes a $3.2 billion exploration program in the Kara and Black Seas.

Earnings Review

Bombardier, Inc., the Canadian aircraft and train maker reported second quarter revenues rose 17% to $4.75 billion from $4.04 billion in the comparable period. Net income in the quarter surged 53% to $211 million or 12 cents per diluted share compared to net income of $138 million or 7 cents per share a year earlier.

Joy Global Inc. ((JOYG)), the mining equipment manufacturer reported third quarter net sales surged 33.7% to $1.14 billion from $850 million in the prior year. Net income in the quarter surged 46% to $173.11 million or $1.62 per share compared to net income of $118.50 million or $1.13 per share last year.

Jos. A. Bank Clothiers, Inc. ((JOSB)), the men''s clothing and accessories retailer said second quarter total sales increased 22.4% to $230.7 million from $188.4 a year ago, while comparable store sales increased 14.7% and direct marketing sales increased 27.8%.

Net income for the quarter rose 24.7% to $20.6 million or 74 cents per diluted share compared to net income of $16.5 million or 59 cents per share last year.