U.S. Jobless Claims Rise 11,000; Consumer Prices Up 0.4%

Arthi Gupta
15 Sep, 2011
New York City

U.S. indexes gained on the euro zone optimism. New unemployment claims in the U.S. rose to 428,000. The consumer price index for the U.S. rose 0.4% and foreclosure filings increased in August. Teradyne agreed to purchase LitePoint for $510 million.

[R]9:20 AM New York – U.S. indexes gained on the euro zone optimism. New unemployment claims in the U.S. rose to 428,000. The consumer price index for the U.S. rose 0.4% and foreclosure filings increased in August. Teradyne agreed to purchase LitePoint for $510 million.[/R]

The U.S. stocks traded higher on the back of optimism in the euro-zone and higher markets in Asia. German Chancellor Angela Merkel and French President Nicolas Sarkozy expressed confidence about the Greece’s place in the euro zone.

The video conference among Merkel, Sarkozy and Greek Prime Minister George Papandreou did not lead to any specific new announcement. The meeting was largely symbolic showing solidarity with the Greek government.

Greek Prime Minister Papandreou also reiterated that the country will stay on the course to trim the deficit and cut the government spending.

However, there was mixed economic data relating to weekly jobless claims, consumer prices, and foreclosure filings.

European indexes traded higher after French Prime Minister Nicolas Sarkozy and German Chancellor Angela Merkel said in a joint statement that the future of Greece is in the euro-zone.

The Italian Parliament gave its final approval to a €54 billion-austerity plan after watering down several of the proposals and adding some new ones like a sales tax hike and revised wealth tax in an effort to balance the country''s budget by 2013.

Spain raised €3.95 billon through a bond issue today. The amount was only slightly below the maximum target of €4 billion.

The Treasury sold €1.5 billion of bonds maturing in October 2020 at an average yield of 5.156% with a bid-to-cover ratio of 1.99, €1.4 billion of April 2020 bonds at 5.006% with a bid-to-cover ratio of 2.01, and €1 billion of July 2019 bonds at 4.969% with a bid to cover of 2.17.

Asian markets too edged higher after positive developments in Europe.

U.S. Jobless Claims Rise

New unemployment claims in the U.S., on a seasonally adjusted basis rose to 428,000 for the week ending Sept. 10, according to data released by the U.S. Department of Labor today. This was 11,000 higher than the previous week''s revised figure of 417,000.

U.S. CPI Up

The consumer price index for the U.S. rose 0.4% in August, following the 0.5% increase in July, according to data released by the U.S. Labor Department today.

Consumer prices excluding food and energy sectors rose 0.2% in August.

U.S. Foreclosure Filings Rise

U.S. foreclosure filings increased 7% in August from July, but decreased 33% from a year ago, with one in every 570 U.S. housing units receiving a foreclosure filing during the month, according to RealtyTrac.

Foreclosure filings, which include default notices, scheduled auctions and bank repossessions were 228,098 properties in August.

California, Florida, Michigan, Illinois and Georgia together accounted for 53% of U.S. foreclosure activity in August.

Rio Tinto Plans Iron Ore Expansion

Rio Tinto is to invest $833 million in major power and fuel supply projects as part of its drive to substantially increase iron ore production capacity in Western Australia.

Rio Tinto''s integrated Pilbara power and gas network will be upgraded with a $520 million investment and a further $313 million will be allocated to fuel infrastructure facilities.

The company also said it has priced $2 billion of fixed rate bonds that include $500 million of five-year, $1.15 billion of 10-year and $350 million of 30-year SEC-registered debt securities.

Teradyne Buys LitePoint

Teradyne agreed to purchase privately held LitePoint Corporation, a leading provider of production line test equipment for wireless products including smart phones, tablets and WiFi-enabled PCs, for $510 million net of LitePoint cash and tax benefits plus $70 million if certain performance targets are met extending through 2012.

Earnings Review

Ascena Retail Group Inc. ((ASNA)), the women''s apparel company reported fourth quarter sales rose 2% to $726 million, from $711 million a year ago. Net earnings in the quarter declined 33% to $28 million or 35 cents per diluted share compared to net earnings of $42 million or 52 cents per share last year.

CLARCOR Inc. ((CLC)), the filtration and packaging product maker reported third quarter revenues grew 8% to $284.8 million from $262.8 million in the year-ago quarter. Net profit in the quarter rose 13.2% to $32.1 million or 63 cents per diluted share compared to net profit of $28.3 million or 55 cents per share last year.

Pall Corporation ((PLL)), the filtration and purification products maker reported fourth quarter sales rose 15% to $780.4 million, from $678.6 million last year. Net profit in the quarter surged 77% to $97.4 million or 82 cents per diluted share compared to net profit of $54.95 million or 46 cents per share last year.

Pier 1 Imports, Inc. ((PIR)), the home furnishings retailer said second quarter net sales grew 9.6% to $339.55 million from $309.87 million last year on comparable store sales increase of 10.8%. Net income in the quarter gained 15.3% to $16.6 million or 14 cents per diluted share compared to net income of $14.4 million or 12 cents per share last year.

Rockwell Collins, Inc. ((COL)), the provider of aviation and information technology systems and services estimates fiscal year 2012 revenues between $4.9 billion and $5 billion with earnings in the range of $4.40 to $4.60 per share.