U.S. Weekly Jobless Claims Fall, Producer Prices Rise

Arthi Gupta
15 Dec, 2011
New York City

The U.S. indexes gained after weekly jobless claims fell to 366,000, producer price index rose 0.3% and foreclosure filings declined 14% in November. Lam Research agreed to acquire Novellus for $3.3 billion and Fujifilm agreed to buy SonoSite for $995 million.

[R]9:35 AM New York – The U.S. indexes gained after weekly jobless claims fell to 366,000, producer price index rose 0.3% and foreclosure filings declined 14% in November. Lam Research agreed to acquire Novellus for $3.3 billion and Fujifilm agreed to buy SonoSite for $995 million.[/R]

U.S. indexes traded higher after a barrage of economic data in the U.S. and Europe and the dollar resumed its advance against the yen and the euro.

Initial jobless claims in the U.S. for the week fell 19,000, producer price index rose 0.3%, and New York region manufacturing activity improved in December.

European indexes traded higher after better than expected results of the Spanish Treasury auction and a slight rebound in the euro after dropping to a 10-month low.

Markets also focused on the latest note from the IMF that Greece is still behind in meeting its pledge to implement austerity measures and cut commitment to state controlled corporations.

In addition, Greece has still not finalized its deal with bond holders where it is seeking at least 50% reduction in the principal payment.

Asian stocks fell for a third day today and market indexes in Japan dropped 1.7%, in Australia declined 1.2% and the benchmark index in India dropped to a new low for the year and declined 22.5% in the year so far.

The benchmark index in Japan is down 18% in the year so far as ocean freight companies dropped 50% in the year and the yen hovered near 2-month high.

U.S. Weekly Jobless Claims Slump

The number of people filing first-time unemployment claims slumped last week.

The U.S. Labor Department reported that initial jobless claims were at 366,000 for the week ended December 10, down 19,000 from the previous week''s revised total of 385,000.

U.S. Producer Prices Rise

The U.S. Labor Department said its producer price index rose 0.3% in November after falling 0.3% in October.

Excluding the increase in food and energy prices, the core producer price index climbed 0.1% in November after coming in unchanged in October.

Separately, New York manufacturing activity improved in December, according to a report released by the Federal Reserve Bank of New York today.

The New York Fed said its general business conditions index jumped to 9.5 in December from 0.6 in November.

U.S. Foreclosure Filings Drop

U.S. foreclosure filings declined 14% in November from last year and 3% sequentially.

Foreclosure filings, which include default notices, scheduled auctions and bank repossessions, were reported on 224,394 properties in November, according to industry data tracking firm RealtyTrac.

The report also showed one in every 579 housing units with a foreclosure filing during the month.

Lam Research to Acquire Novellus

Lam Research Corp. agreed to acquire Novellus Systems, Inc. in an all-stock transaction valued at approximately $3.3 billion.

Additionally, Lam announced a new $1.6 billion stock repurchase program.

Fujifilm to Buy SonoSite

Fujifilm Holdings Corp., Japan''s diversified technology company agreed to acquire ultrasound technology firm SonoSite, Inc. for $54 per share in cash or approximately $995 million.

The purchase price represents a premium of 50% over SonoSite’s average closing stock price over the three months ended December 14.

Earnings Review

Coca-Cola Enterprises Inc. ((CCE)), the marketer, producer, and distributor of Coca-Cola products affirmed earnings per share guidance for full-year 2011 in a range of $2.14 to $2.18, with results expected at the higher end of the range.

Pier 1 Imports, Inc. ((PIR)), the home furnishings retailer reported third quarter net sales grew 8.2% to $382.70 million from $353.76 million in the same quarter last year. Net income in the quarter rose 9.5% to $22.99 million or 21 cents per diluted share compared to net income of $21.0 million or 18 cents per share in the prior-year quarter.

Rite Aid Corporation ((RAD)), the retail drugstore chain reported third quarter revenues grew 1.8% to $6.31 billion from $6.20 billion in the same quarter last year. Net loss in the quarter narrowed 34.2% to $51.99 million or 6 cents per diluted share compared to net loss of $79.07 million or 9 cents per share in the prior-year quarter.