U.S. Jobless Claims at 4-Year Low; Construction Spending Drops

Arthi Gupta
01 Mar, 2012
New York City

The U.S. indexes edged up after mixed domestic economic data and construction spending and manufacturing index fell but personal income and spending rose less than estimated. U.S. jobless claims were at their lowest level in almost four years.

[R]11:50 AM New York – The U.S. indexes edged up after mixed domestic economic data and construction spending and manufacturing index fell but personal income and spending rose less than estimated. U.S. jobless claims were at their lowest level in almost four years.[/R]

U.S. indexes gained after jobless claims were at their lowest level in almost four years and personal income and spending rose less than estimated in January.

Wal-Mart announced a 9% increase in its annual dividend for fiscal year 2013.

European markets gained after the Spanish Treasury sold €4.5 billion bonds at lower yields and inflation rose at the faster pace in the region and unemployment surged to the record high since the creation of the euro.

The Greek parliament approved pension and health reforms aimed at cutting costs by €3.2 billion with 213 votes in favour and 58 against and public workers struck today in Athens opposing measures.

Euro area finance ministers are set to meet later today in Brussels to discuss Greece’s second bailout package.

Asian markets closed lower despite Chinese manufacturing growth at five-month high and Australian indexes fell after copper and gold prices declined in overnight trading.

China''s purchasing managers'' index for the manufacturing sector improved for a third month in a row to 51 in February from the January reading of 50.5.

U.S. Weekly Jobless Claims Drop

Initial claims for U.S. unemployment benefits showed an unexpected decrease in the week ended February 25, according to a report released by the U.S. Labor Department today.

The report showed that initial jobless claims edged down to 351,000 from the previous week''s revised figure of 353,000.

The four-week moving average fell to 354,000 from the previous week''s revised average of 359,500 and continuing claims edged lower to 3.402 million in the week ended February 18 from the preceding week''s revised level of 3.404 million.

U.S. Construction Spending Declines

U.S. construction spending declined to a seasonally adjusted annual rate of $827 billion, a drop of 0.1% in January following a revised 1.4% increase in December, down slightly from the 1.5% rise initially reported, according to data released by the U.S. Commerce Department today.

Separately, U.S. personal income and spending both increased, according to data released by the U.S. Commerce Department.

Personal income rose 0.3% or $37.4 billion in January compared to the 0.5% growth in December, driven by increases in wages and salaries in the private sector.

Consumer spending climbed 0.2% in January.

U.S. Manufacturing Index Falls

The Institute for Supply Management said its index of activity in the manufacturing sector dropped to 52.4 in February from 54.1 in January.

The report showed that the new orders index declined to 54.9 in February from 57.6 in January, while the production index fell to 55.3 in February from 55.7 in January.

Earnings Review

Bombardier, Inc., the manufacturer of transportation solutions reported fourth quarter consolidated revenues dropped 23% to $4.32 billion from $5.59 billion in the previous year.

Net income in the quarter fell 27.5% to $214 million or 12 cents per diluted share compared to net income of $295 million or 16 cents per share for the corresponding period the previous year.

For fiscal year 2011, consolidated revenues rose to $18.3 billion compared to $17.9 billion last fiscal year. Net income for the year climbed to $837 million or 47 cents per diluted share compared to $775 million or 42 cents per share last fiscal year.

The Kroger Co. ((KR)), the grocery retailer reported fourth quarter total sales, including fuel, increased 7.7% to $21.4 billion in the fourth quarter of fiscal 2011 compared with $19.9 billion for the same period last year.

Net loss in the quarter, including the effect of the UFCW pension plan consolidation was $306.9 million or 54 cents per diluted share compared to a profit of $278.8 million or 44 cents per share a year ago.

For fiscal year 2011, total sales increased 10.2% to $90.4 billion compared with $82.0 billion for fiscal year 2010.

Including the effect of the UFCW pension plan consolidation, fiscal year 2011 earnings were $602.1 million or $1.01 per diluted share compared to net earnings for fiscal year 2010 of $1.1 billion or $1.74 per diluted share.

The Wendy''s Company ((WEN)), the holding company reported fourth quarter consolidated revenues rose 5.6% to $615.02 million from $582.58 million in the prior-year quarter. Net profit in the quarter was $3.9 million or 1 cent per diluted share compared with a net loss of $10.8 million or 3 cents per share a year ago.