Stocks in NY Focus on Greece, Jobless Claims, Rates on Hold in Europe

Arthi Gupta
08 Mar, 2012
New York City

The U.S. and European indexes rose on anticipation that the Greece meet its target for debt swap and avoid a default. The European Central Bank and Bank of England held key rates. New jobless claims in the U.S. rose to 362,000.

[R]9:35 AM New York – The U.S. and European indexes rose on anticipation that the Greece meet its target for debt swap and avoid a default. The European Central Bank and Bank of England held key rates. New jobless claims in the U.S. rose to 362,000.[/R]

U.S., European and Asian markets traded higher on optimism ahead of the Greek debt swap deal with a deadline this evening. However, it is far from clear if Greece will be able to avoid a default.

Private investors in Greece will have to decide by 8 p.m. local time whether to take a 53.5% haircut of their existing Greek holdings in exchange for new bonds that pay lower interest rate.

At least 61% of private holders of Greek debt have agreed to the swap but uncertainty reigns if hedge funds will participate in the swap or challenge the offer in courts that may drag for more than a decade.

Adding to woes Greece’s jobless rate reached to a record high of 21% in December, according to latest reports.

The European Central Bank left its key interest rate unchanged at a record low 1% for the third month in a row.

The Bank of England decided to retain the interest rate at 0.5% and maintain the asset purchase program at £325 billion.

U.S. Weekly Jobless Claims Rise

New jobless claims in the U.S. rose at a seasonally adjusted level of 362,000 for the week ending March 3, an increase of 8,000 from the previous week''s revised claims of 354,000, according to data released by the U.S. Labor Department today.

Simon Group Acquires Stake in Klépierre

Simon Property Group, Inc. said it is acquiring a 28.7% equity stake in Klépierre from BNP Paribas for €28 per share or a total transaction value of approximately $2 billion or €1.5 billion.

GM Recalls Vehicles in China

General Motors is recalling 18,204 imported sport utility vehicles in China to fix anti-lock breaking systems that may cause a safety hazard, according to statement on the Webs site of the nation''s General Administration of Quality Supervision, Inspection and Quarantine.

The recall affects 16,618 Chevrolet Captiva vehicles and 1,586 Opel Antara vehicles built between April 11, 2006 and November 9, 2009.

Earnings Review

McDonald''s Corporation ((MCD)), the fast food restaurant chain said its global comparable sales grew 7.5% in February and systemwide sales for the month climbed 9.4%, or 9.7% in constant currencies.

Rite Aid Corporation ((RAD)), the drugstore chain operator reported same store sales rose 3.1% for the five weeks to March 3 from the prior-year period. Total drugstore sales for the five-week period increased 2.3% to $2.55 billion compared to $2.5 billion in the same period last year.

Smithfield Foods, Inc. ((SFD)), the packaged pork and meat products maker reported third quarter sales increased 9% to $3.48 billion from $3.19 billion in the prior year. Net income in the quarter slumped 61% to $79 million or 49 cents per diluted share compared to net income of $202.6 million or $1.21 per share reported a year ago.

Williams-Sonoma, Inc. ((WSM)), the specialty home products retailer reported fourth quarter net revenues increased 6.1% to $1.27 billion from $1.20 billion a year earlier. For the quarter, comparable brand revenue, including both comparable store net revenues and total direct-to-customer net revenues, rose 6.6% compared to the 10.9% increase a year ago.

Net earnings in the quarter rose 8.1% to $122.59 million or $1.17 per diluted share compared with net earnings of $113.40 million or $1.05 per share last year.

For fiscal year 2011, net revenues in increased 6.2% to $3.721 billion from $3.504 billion in fiscal year 2010. For the year, comparable brand revenue growth increased 7.3% compared to 13.9% in fiscal year 2010. Net earnings for the year rose 18.3% to $ 236.93 million or $2.22 per diluted share compared with net earnings of $200.23 or $1.83 per share in the prior year.