U.S. Jobless Rate at 8.6%; Higher Chain Stores Sales

Arthi Gupta
02 Dec, 2011
New York City

The U.S. indexes traded higher after retailers reported better than expected comparable-store sales and jobless rate dropped to 8.6% in November. Rising retail sales and auto sales were yet another confirmation that consumers are ready to spend more.

[R]10:00 AM New York – The U.S. indexes traded higher after retailers reported better than expected comparable-store sales and jobless rate dropped to 8.6% in November. Rising retail sales and auto sales were yet another confirmation that consumers are ready to spend more.[/R]

U.S. indexes traded higher after retailers reported better than expected comparable-store sales in November and jobless rate dropped to 8.6% in November.

Across the Atlantic, European markets gained as politicians offered more promises and appear to work on arranging additional financing to contain the widening and deepening debt contagion in the euro zone.

German Chancellor Angela Merkel while addressing the Bundestag on Friday said that the European nations are working toward setting up a “fiscal union” with rigorous budgetary oversight to resolve the euro-zone''s debt crisis.

Merkel told lawmakers that she rejected the idea of the European Central Bank issuing Eurobonds, and that the discussion about it ""does not contribute to the resolution of the crisis.""

Separately, French President Nicolas Sarkozy is to meet German Chancellor Angela Merkel next Monday in Paris and meet UK''s Prime Minister David Cameron today.

European leaders are scheduled to meet in Brussels on December 9 for possible changes to the EU treaties.

Asian markets traded mixed.

South Korea''s raised its gold holdings for the second time this year to diversify its official reserves, the Bank of Korea said today.

The central bank bought 15 metric tons of gold in November, taking its gold holdings to $2.17 billion. In October, gold amounted to $1.32 billion.

U.S. Jobless Rate Drops

The jobless rate in the U.S. unexpectedly dropped to 8.6% in November, the lowest level since March 2009, from 9% in October, according to a report released by the U.S. Labor Department today.

Non-farm payrolls rose 120,000 in November, after a revised 100,000 rise in October, more than initially estimated.

U.S. Comps Up

U.S. retailers Limited Brands, Target, Ross Stores, Nordstrom and Macy''s reported increases in sales performances for November at stores open for at least a year. Kohl''s, Gap and J.C. Penney reported weaker sales.

Separately, General Motors, Ford and Chrysler reported higher U.S. vehicle sales for the month of November.

GM said its U.S. vehicle sales for November rose 6.9% to 188,402 units from 168,739 units in the same month last year.

Ford sold 166,865 vehicles in the U.S. in November, an increase of 13.3% from 147,338 vehicles sold in the same month last year.

Chrysler said its U.S. vehicle sales for November increased 45% to 107,172 units from 74,152 units in the prior-year month.

ConAgra Completes Acquisition of National Pretzel

ConAgra Foods, Inc. completed its acquisition of National Pretzel Company, based in Lancaster, Pa., from Brookstone Holdings. Financial terms were not disclosed.

Earnings Review

Big Lots, Inc. ((BIG)), the closeout retailer reported third quarter net sales increased 7.5% to $1.14 billion from $1.06 billion in the previous year.

Net income in the quarter plunged 76.3% to $4.19 million or 6 cents per diluted share, a combined result from U.S. operations as well as newly acquired Canadian operations compared to net income of $17.69 million or 23 cents per share from U.S. operations only last year.

H&R Block, Inc. ((HRB)), the tax service provider said second quarter total revenues increased 8% to $129.2 million from $119.6 million a year earlier. Net loss from continuing operations widened 30% to $141.7 million or 47 cents per diluted share compared to a net loss of $109 million or 36 cents per share last year.

PVH Corp. ((PVH)), the apparel maker said third quarter total revenue rose 9% to $1.65 billion from $1.52 billion in the same quarter last year. Net income in the quarter rose 12% to $112.2 million or $1.54 per share compared to net income of $99.8 million or $1.39 per share for the year-ago quarter.

Royal Bank of Canada ((RY)), the Canadian financial services provider reported fourth quarter total revenues rose 0.3% to C$6.80 billion from C$6.78 billion in the same quarter last year. Net income in the quarter increased 44.3% to C$1.53 billion or C$1.07 per share compared to net income of C$1.06 billion or C$0.74 per share in the prior-year quarter.