U.S. Jobless Claims Above 400K, Apple Fans in Mourning

Devan Biswas
06 Oct, 2011
New York City

U.S. stocks advanced in a cautious trading after weekly jobless claims increased but were lower than expected. Apple Inc

[R]11:30 AM New York – U.S. stocks advanced in a cautious trading after weekly jobless claims increased but were lower than expected. Apple Inc’s Chairman former chief executive died on Wednesday. Central banks in Europe and UK held rates and European leaders searched ways to recapitalize banks.[/R]

U.S. weekly jobless claims declined, European central bank held rates and Apple Inc Chairman Steve Jobs died Wednesday.

U.S. stocks struggled but advanced in the morning after initial weekly jobless claims were less than expected and the central banks in Europe held rates.

Weekly initial jobless claims at the end of last week increased 6,000 to 401,000, according to Labor Department. Though the claims were lower than expected but still hovered near the key level of 400,000.

The number of people collecting weekly jobless benefits declined 52,000 to 3.7 million in the week ending on Sept 24 and the number of people collecting extended benefits decreased 28,370 to 3.55 million in the week ending on Sept 17.

Across the Atlantic, investors pinned their hopes on the talks to recapitalize banks. The slow moving political process appears to be heading to endorse the bank recapitalization.

European markets scaled higher for the second day after talks of bank recapitalization gained momentum. European leaders are struggling to arrange the financing to offer recapitalization to banks and conduct an orderly default of Greek bonds.

Investors are increasingly worried that the sudden collapse of the Belgium based Dexia SA may mark the beginning of the deepening financial crisis.

However, banks in France were on the rise after a news report in Le Figaro suggested that the government agency is working on a plan to recapitalize at least two large banks.

Separately, after the meeting between German Chancellor Angela Merkel and the European Commission President Jose Manuel Barroso, both leaders pledged to work together to support the bank recapitalization plan.

European Central Bank left its key lending rate at 0.5% and said it will expand its loan program to one year from six months to banks that cannot raise money in the private market. The covered bonds program, first introduced after the collapse of Lehman Brothers, was made available with a longer maturity today.

Bank of England left its lending rate at 0.5% and said it will expand its bond buying program by 75 billion pounds and complete the purchases in the next four months.

Stock Movers

Apple Inc ((AAPL)) surged 1.5% to $384.27 in sympathy after the company said its Chairman former chief executive Steve Jobs died. Jobs led the company to the largest market cap of all U.S. publicly traded companies from its near demise only twelve years ago with the launch of successful music device, phone and computer tablets.

Corning Inc ((GLW)) gained 4.7% to $13.18 after the engineering company announced a stock buyback of $1.5 billion and increased its quarterly dividend 50%.

Ruby Tuesday, Inc ((RT)) gained 3.2% to $7.39 after the casual dining restaurant chain operator said fiscal first quarter dropped 75% and comparable sales declined from a year ago. The company also lowered its full-year earnings outlook.

AMR Corp ((AMR)) declined 1.2% to $2.42 after the parent of American Airlines said its September traffic increased 1.9% on the steady rise in international travel to across the Pacific to Asia.

Marriott International, Inc. ((MAR)) increased 1.9% or 55 cents to $28.73 after the hotels operator reported third quarter total revenues soared to $2.87 billion compared to $2.65 billion in the same period last year.

Net loss in the quarter swung to $179 million or 52 cents per diluted share compared to net income of $83 million or 22 cents per share a year ago.

Constellation Brands, Inc. ((STZ)) increased 9.4% or $1.76 to $20.48 after the wine company reported second quarter net sales declined to $0.77 billion compared to $1.06 billion in the same period last year.

Net income in the quarter increased to $162.7 million or 76 cents per diluted share compared to $91.3 million or 43 cents per share a year ago.