U.S. Jobless Claims Drop 6,000; eBay Net Rises 13.6%

Arthi Gupta
20 Oct, 2011
New York City

The U.S. indexes traded sideways after debt talks in Europe were at a standstill and Greece strike extended for the second day. U.S. weekly jobless claims fell to 403,000. Autodesk agreed to acquire UK-based Micro Application Packages Limited. Philip Morris quarterly net rose 31%.

[R]9:35 AM New York – The U.S. indexes traded sideways after debt talks in Europe were at a standstill and Greece strike extended for the second day. U.S. weekly jobless claims fell to 403,000. Autodesk agreed to acquire UK-based Micro Application Packages Limited. Philip Morris quarterly net rose 31%.[/R]

U.S. indexes traded cautiously in early trading with the growing pessimism for the debt talks in Europe. Greece strike continued for the second day and MasterCard and Visa Inc were named in a price fixing case for ATM access charges.

The Greek parliament votes today on fresh spending cuts demanded by the EU and IMF to release sixth instalment of the bailout funds.

In a show of solidarity yesterday, the Greek union led strike saw nearly 100,000 people taking to the streets and clashing violently with police. Airports, schools, retail shops and petrol stations remained closed.

Greek lawmakers late on Wednesday gave their preliminary approval in favor of the measure, with 154 lawmakers in favour and 141 against and five abstained.

In another major move, the European Commission wanted EU Internal Market Commissioner Michel Barnier to prohibit rating agencies, if necessary, to publish judgments about ailing EU countries, according to The Financial Times Deutschland.

Spanish bond yields remained high in an auction today after the country issued €3.9 billion in new debt. The Treasury had to pay higher borrowing costs following recent downgrades by major rating agencies.

Spain''s Treasury sold five-year bonds for €1.082 billion with the bid-to-cover ratio of 1.8 at an average yield of 4.782%, up from 4.489% at the last comparable sale on September 1.

The Treasury also issued €1.036 billion in bonds maturing in 2019 with the bid to cover ratio at 2.1. The average yield rose from 4.969% at the previous comparable auction on September 15to 5.11%.

Also, €1.788 billion was sold in bonds maturing in 2021 with the bid to cover ratio at1.8 and the average yield was 5.433%, down from 5.896% at the previous comparable auction in July.

Asian markets too traded lower.

The U.S. economy continued to expand in September, although the pace of growth was ""modest"" or ""slight"" in a number of regions, according to the Federal Reserve''s Beige Book.

Consumer spending was up slightly in most of the Fed''s twelve districts, but weakness in the housing market remained a major drag on U.S. growth.

U.S. Weekly Jobless Drops

The seasonally adjusted new claims for unemployment benefits declined 6,000 to 403,000 for the week ended October 15 compared to the previous week''s revised level of 409,000, according to data released by the U.S. Labor Department today.

However, the number of new claims is still above the key 400,000 level.

Autodesk Acquires Micro Application Packages Limited

Autodesk Inc. said it acquired Micro Application Packages Limited, a UK-based provider of CAD, CAM and estimating software that supports fabrication and construction for the mechanical, electrical and plumbing industry. Terms of the transaction were not disclosed.

Earnings Review

AT&T Inc. ((T)), the provider of telecommunications services said third quarter consolidated revenues fell 0.3% to $31.48 billion, versus $31.58 billion in the year-earlier quarter. Net income in the quarter plummeted 71% to $3.63 billion or 61 cents per diluted share compared to net income of $12.32 billion or $2.07 per share last year, which included one-time gains from a tax settlement and the sale of Sterling Commerce.

eBay Inc. ((EBAY)), the online auctioneer said third quarter revenue rose 32% to $2.97 billion from $2.25 billion in the same quarter last year. Net income in the quarter increased 13.6% to $490.5 million or 37 cents per diluted share compared to net income of $431.9 million or 33 cents per share for the year-ago quarter.

Philip Morris International Inc. ((PM)), the international tobacco company reported third quarter net revenues rose 22.3% to $20.71 billion from 16.94 billion in the prior year quarter. Net earnings in the quarter climbed 30.5% to $2.377 billion or $1.35 per diluted share compared to net earnings of $1.822 billion or 99 cents per share last year.

Southwest Airlines Co. ((LUV)), the passenger airline stated third quarter total operating revenues rose 35% to $4.31 billion from $3.19 billion in the prior-year quarter. Net loss in the quarter was $140 million or 18 cents per diluted share compared to a net profit of $205 million or 27 cents per share last year.