Wall Street Higher on Stronger Housing Starts, Lower Jobless Claims

Nichole Harper
16 Feb, 2012
New York City

U.S. stocks traded higher after investors focused on domestic economic data and overlooked gathering storms in Europe. Banks faced another round of downgrade. General Motors reported large annual income but quarterly profits were hurt by European operations.

[R]1:05 PM New York – U.S. stocks traded higher after investors focused on domestic economic data and overlooked gathering storms in Europe. Banks faced another round of downgrade. General Motors reported large annual income but quarterly profits were hurt by European operations.[/R]

U.S. stocks gained after market indexes declined for two days in a row on better than expected housing data, regional manufacturing growth and weekly jobless claims.

Banks were under pressure after a credit opinion firm lowered its views on 17 global banks and other European financial institutions.

Weekly new jobless claims declined in the week ended February 11 to 348,000 according to the latest data released by Labor Department. The claims in the prior week were revised to 361,000 from an initial estimate of 358,000.

Only nine states showed an increase in weekly claims and unemployment rate among people who are eligible for claims declined at the end of the week to 2.7% from 2.8% in the previous week.

In the week ending February 4, the number of people collecting jobless benefits declined 100,000 to 3.43 million. The data does not include people who are receiving extended benefits.

The wholesale prices measured by the producer prices index increased 0.1% in January. Prices excluding food and energy increased 0.4% on higher prices of drugs and medication. Cost of intermediate goods declined 0.4% and crude oil prices increased 1.5% after falling 1.5% in December.

Housing starts increased 1.5% to 699,000 from a revised 689,000 annual rate in December.

Stock Movers

Alibaba Group Holdings Ltd is close to agreeing to take $3 billion loan that may lead to a deal with its largest stock holder Yahoo! Inc. The company is expected to go private and may offer 40% premium for the stock swap.

Yahoo! Gained 0.6% to trade at $15.22.

CBS Corporation ((CBS)) fell 35 cents to $29.22 after the broadcasting company reported fourth quarter total revenues fell to $3.78 billion and net earnings in the quarter increased to $370 million or 55 cents a diluted share compared to $283 million or 41 cents per diluted share in the year ago.

The stock eased after the company sales missed analysts expectations.

For 2011 total revenue increased to $14.25 billion from $14.06 billion in last year. Net earnings increased to $1.31 billion or $1.92 a share compared to $720 million or $1.04 a share in the prior year.

Cliffs Natural Resources Inc. ((CLF)) decreased 3.1% or $2.18 to $66.50 after the mining company reported fourth quarter revenues increased 17% to $1.66 billion and net income in the quarter slumped 52% to $185.4 million or $1.30 per diluted share compared to $384.1 million or $2.82 a diluted share in the year ago quarter.

General Motors Company ((GM)) gained 4% or $1.02 to $25.95 after the automotive company reported fourth quarter net sales rose 3% to $38 billion from $36.9 billion in the same quarter last year. Net income in the quarter was flat at $500 million or 28 cents per diluted share compared to $500 million or 31 cents per diluted share in the year ago.

For 2011, total revenue increased 11% to $150.3 billion from $135.6 billion in last year. Net income for the year increased to $7.6 billion or $4.58 per diluted share compared to $4.7 billion or $2.89 per share in the prior year.

NetApp, Inc. ((NTAP)) increased 6.4% or $2.59 to $42.47 after the data storage solution provider reported third quarter net revenues increased but net income dropped sharply.

The J. M. Smucker Company ((SJM)) dropped 9.1% or $7.11 to $71.04 after the food processing company reported third quarter net sales increased 12% to $1.47 billion and net income dropped 11% to $116.8 million or $1.03 a diluted share compared to $132 million or $1.11 per diluted share in the year ago quarter.

The company guided adjusted earnings in the current year not to exceed $4.65 a share compared to analysts’ estimate as high as $5.10 a share.

UBS AG, Credit Suisse AG, Morgan Stanley ((MS)), Goldman Sachs ((GS)) and Bank of America ((BAC)) traded lower after Moody’s lowered its views on 17 global banks.

Bank of America, Citigroup and JP Morgan Chase reversed earlier losses of 1% to trade up 1.8% and Goldman Sachs increased 1%.