U.S. Indexes in Mixed Trading; Mortgage Applications Drop

Arthi Gupta
04 Jan, 2012
New York City

The U.S. indexes futures edged lower ahead of the factory goods order data and U.S. mortgage applications declined. Chesapeake said it is on target to achieve its long-term debt net of cash to be about $9.5 billion as of year-end 2012.

[R]9:00 AM New York – The U.S. indexes futures edged lower ahead of the factory goods order data and U.S. mortgage applications declined. Chesapeake said it is on target to achieve its long-term debt net of cash to be about $9.5 billion as of year-end 2012.[/R]

U.S. indexes futures traded lower ahead of the factory goods orders report from the Commerce Department later today at 10 a.m. ET. The report tracks the orders for factory equipment and is expected to rise at least 1.8% after falling 0.4% in October.

The U.S. government is contemplating tougher sanctions against Iran.

The U.S. State Department spokesperson Victoria Nuland during a daily press briefing on Tuesday said that it is ""working with its allies and partners together to tighten sanctions that already exist on Iran and to encourage countries around the world to decrease their dependence on Iranian oil.""

The U.S. Defense Department said on Tuesday that its warships would continue to remain in the Persian Gulf despite an Iranian threat to take action if the U.S. aircraft carrier, moved out of the Gulf earlier due to Iran''s naval exercises, returns to the region.

Last week, Iran had threatened to stop ship movements through the Strait of Hormuz, a vital oil-trade route in the Indian Ocean, if the West imposes more sanctions on the Islamic Republic over its controversial nuclear program.

European indexes edged lower on the ongoing debt crisis.

Germany successfully auctioned €4.06 billion in 10-year bonds at an average yield of 1.93%, down from 1.98% in November after getting bids for €5.14 billion of the debt securities.

The yield on Germany’s 10-year debt rose three basis points to 1.93%.

Greece may be forced out of euro if leaders failed to agree on the second bailout package in three months, reports said. ""The second bailout agreement must be signed otherwise we are out of the markets, out of the euro,"" reports quoted Greek government spokesman Pantelis Kapsis as saying in an interview to television channel Skai.

The annual inflation rate of the euro-zone eased to 2.8% in December, in line with estimates, according to a flash estimate released by Eurostat.

Asian stocks traded higher on upbeat global economic data and the Nikkei soared 1.2% in the first trading day on 2012.

U.S. Mortgage Applications Drop

U.S. mortgage applications declined 4.1% in the week ended December 30, according to the Mortgage Bankers Associations.

Purchase loan requests dropped 9.6% and refinancing demand fell 2.5%.

Average 30-year conforming mortgage rates dipped to the year''s low of 4.07% from 4.10% the prior week.

Earnings Review

Acme Packet, Inc. ((APKT)), the networking equipment maker expects fourth quarter revenues between $84 million and $86 million and GAAP earnings of $0.16 to $0.18 per share and non-GAAP earnings per share of $0.26 to $0.28.

Chesapeake Energy Corporation ((CHK)), the natural gas producer said that it reduced long-term debt significantly in 2011, and is on target to achieve its long-term debt net of cash to be about $9.5 billion as of year-end 2012, irrespective of the price of natural gas during the year.

National Instruments Corp. ((NATI)), the supplier of computer-based measurement and automation products estimated fourth-quarter earnings of $0.19 to $0.20 per share, and revenues for the period of $277 million, due to reduced demand for its measurement and automation products in crisis hit Europe.

Progress Software Corporation ((PRGS)), the global enterprise software company said fourth quarter revenue fell 6% to $136.3 million, from $145.2 million last year. Net income in the quarter slumped 45% to $11.7 million or 18 cents per diluted share compared to net income of $21.3 million or 31 cents per share last year.