U.S. Claims Drop, Productivity Up; MasterCard Net Surges 24%

Arthi Gupta
02 Feb, 2012
New York City

The U.S. indexes gained after weekly jobless claims fell 12,000 to 367,000 and labor productivity increased 0.7% in the fourth quarter of 2011. American Airlines planned to cut 13,000 jobs. Facebook filed to raise $5 billion in initial public offering.

[R]9:35 AM New York – The U.S. indexes gained after weekly jobless claims fell 12,000 to 367,000 and labor productivity increased 0.7% in the fourth quarter of 2011. American Airlines planned to cut 13,000 jobs. Facebook filed to raise $5 billion in initial public offering.[/R]

U.S. indexes traded higher after weekly jobless claims fell more than estimated and labor productivity rose in the fourth quarter of 2011.

European markets traded mixed after Royal Dutch Shell earnings fell 4% on weak refining margins and Deutsche Bank net plunged 76%. France raised €7.962 billion and Spain sold €4.56 billion of debt at auctions today as borrowing costs fell.

Asian stocks gained trading U.S. markets.

U.S. Weekly Jobless Claims Fall

New unemployment claims in the U.S. fell, according to data released by the U.S. Labor Department today.

For the week ending January 28, the Department of Labor reported initial claims for unemployment declined 12,000 to 367,000 from the previous week''s revised figure of 379,000, slightly higher than the 377,000 initially reported.

U.S. Labor Productivity Rises

U.S. labor productivity increased 0.7% in the fourth quarter of 2011, according to statistics released by the U.S. Labor Department today, reflecting a 3.6% increase in output, offset by a 2.9% increase in hours worked.

Facebook IPO Seeks $5 Billion

Facebook Inc. on Wednesday filed an S-1 registration statement with the U.S. Securities and Exchange Commission for an initial public offering and indicated it plans to raise at least $5 billion.

The online networking site reported $1 billion in net income on $3.7 billion in net sales driven by 85% sales from advertising and 12% from online game provider Zynga.

Facebook in private trading is valued at $85 billion and attracts daily 845 million monthly active users and has about 60% penetration among Internet users in home country and more than 80% penetration in Chile, Venezuela and Turkey.

BioScrip to Sell Certain Assets to Walgreens

BioScrip Inc agreed to sell certain assets of its community specialty pharmacies and centralized specialty and mail service pharmacy businesses to Walgreens Co. for a total of approximately $225 million.

American Airlines to Cut 13,000 Jobs

American Airlines said it will cut 13,000 jobs, around 15% of the company''s total workforce and cut costs by 20% in a bid to return to profitability.

Earnings Review

Lear Corporation ((LEA)), a supplier to the global automotive industry reported fourth quarter net sales rose 11.1% to $3.51 billion from $3.16 billion in the prior year quarter. Net income in the quarter declined 9% to $106.5 million or $1.03 per diluted share compared to net income of $117.1 million or $1.08 per share in the same quarter last year.

MasterCard Incorporated ((MA)), the global payments company reported fourth quarter net revenue gained 20.2% to $1.7 billion from $1.4 billion in the same period in 2010. Net income in the quarter rose 24% to $514 million, or $4.03 per diluted share compared to net income of $415 million, or $3.17 per share, a year earlier,

Sara Lee Corp. ((SLE)) reported second quarter net sales rose 6.1% to $2.08 billion compared with $1.96 billion in the earlier year quarter. Net income in the quarter slumped 44% to $468 million or 79 cents per diluted share compared to net income of $831 million or $1.30 per share last year.

Starwood Hotels & Resorts Worldwide, Inc. ((HOT)), the hotel and leisure company reported fourth quarter revenues rose 14.3% to $1.53 billion, from $1.34 billion last year. Net income in the quarter plunged 50.7% to $167 million or 85 cents per diluted share compared to net income of $339 million or $1.78 per share in the previous year.