Durable Goods Orders Plunge 4%; Confidence Rises

Nichole Harper
28 Feb, 2012
New York City

U.S. stocks traded sideways after durable goods orders fell in January at the sharpest pace in three years on weaker than expected demands for aircrafts and business equipment. Consumer confidence increased in February. Priceline.com soared on quarterly results. Cooper Tire settled a 3-month strike.

[R]11:45 AM New York – U.S. stocks traded sideways after durable goods orders fell in January at the sharpest pace in three years on weaker than expected demands for aircrafts and business equipment. Consumer confidence increased in February. Priceline.com soared on quarterly results. Cooper Tire settled a 3-month strike.[/R]

U.S. indexes traded sideways after durable goods orders fell more than expected in January and consumer confidence rose in February.

The Conference Board said that the consumer confidence index increased to 70.8 in February from a revised 61.5 in January on the rising expectations on jobs and income prospects.

Sharp Fall in Durable Goods Orders

Durable goods orders declined 4% in January, the largest decline in three years and after rising for two months in a row.

Orders fell 3.2% after excluding for transportation and machinery orders fell 10.4%, the sharpest decline since January 2009.

Non-defense capital goods orders excluding aircraft declined 4.5%, the largest fall in a year. Orders for motor vehicles increased 0.9%. Shipment of non-defense capital goods orders that exclude aircraft, the data that is used in the calculation of gross domestic product fell 3.1%.

European Markets Focus on Bank Borrowings Tomorrow

European markets traded mixed but the news linked to Greece and Portugal dominated the market sentiment. The latest credit opinion downgrade did little to sway the market sentiment as investors focused on the credit default swaps trading.

S&P lowered its debt view on Greece to “selective default” from CC and cited the recently inserted clause that will force the debt restructuring on all private investors as long as two-thirds of investors agree.

European Central Bank is expected to announce the results of its second installment of the loans to banks in the euro zone later tomorrow. Expectations are high that borrowing will surpass the previous lending for 3-year loans in December when banks raised 480 billion euros.

Stock Movers

AutoZone, Inc. ((AZO)) decreased 2% or $7.48 to $373.57 after the automotive parts distributor reported second quarter revenue increased 8.6% to $1.80 billion from $1.66 billion in the same quarter last year.

Domestic same store sales increased 5.9% and same store sales across the company increased 8.6%. The quarterly earnings were ahead of the expectations.

Net income in the quarter increased 12.7% to $166.9 million or $4.15 per diluted share compared to $148.1 million or $3.34 per diluted share in the year ago earlier.

Tenet Healthcare ((THC)) edged up a fraction after the hospital chain reported 10 cents a share after excluding certain items.

Cablevision Systems Corporation ((CVC)) gained 3.8% or 60 cents to $16.24 after the cable operator reported fourth quarter net revenues rose to $1.7 billion from $1.6 billion in the same quarter last year. Net income in the quarter slipped to $60.6 million or 22 cents per diluted share compared to $113.9 million or 38 cents per diluted share in the year ago quarter.

Domino’s Pizza, Inc. ((DPZ)) increased 9.2% or $3.10 to $36.64 after the pizza restaurants operator reported fourth quarter total revenues grew to $501.7 million from $480 million in the same quarter last year. Domestic same store sales increased 4.7%. Net income in the quarter increased 6.2% to $30.9 million or 52 cents per diluted share compared to $24.2 million or 39 cents per diluted share in the year ago period.

Ecolab Inc. ((ECL)) decreased 2.1% or $1.33 to $61.29 after the personal and household products developer reported fourth quarter net sales increased 17% to $1.85 billion from $1.58 million in the same quarter last year. Net income in the quarter declined 32% to $88.7 million or 34 cents per diluted share compared to $131.3 million or 56 cents per diluted share in the year ago.

For 2011 net sales increased 12% to $6.8 billion from $6.1 billion in last year. Net income for the year decreased 13% to $462.5 million or $1.91 per diluted share compared to $530.3 million or $2.23 per share in the prior year.

Priceline.com Inc ((PCLN) increased 6.7% or $39.77 to $631.31 after the online travel company reported fourth quarter revenue soared 35.5% to $990.8 million from $731.3 million in the same quarter last year. Net income in the quarter surged 51.5% to $225.7 million or $4.41 per diluted share compared to $135.7 million or $2.66 per diluted share in the year ago.

Sempra Energy ((SRE)) increased 1.4% or 82 cents to $58.72 after the holding company reported fourth quarter total revenue increased to $2.60 billion from $2.34 million in the same quarter last year. Net income in the quarter increased to $292 million or $1.21 per diluted share compared to $280 million or $1.15 per diluted share in the year ago earlier.

Sina ((SINA)) soared 12% to $70.61 after the China focused Internet service provided estimated lower than first quarter revenues.

Coopper Tire & Rubber Company ((CTB)) declined 1% to $17.59 after factory workers in Ohio approved a new 5-year contract after 3-month of lockout.