Jobless Claims at 4-year Low, Cisco in $5 Billion NDS Deal

Nichole Harper
15 Mar, 2012
New York City

U.S. stocks traded sideways in early trading after jobless claims dropped to a 4-year low, producer prices increased 0.4% in February and manufacturing in the Northeast advanced. Foreclosure filings declined 8% in February.

[R]11:30 AM New York – U.S. stocks traded sideways in early trading after jobless claims dropped to a 4-year low, producer prices increased 0.4% in February and manufacturing in the Northeast advanced. Foreclosure filings declined 8% in February.[/R]

Stocks after one hour of trading struggled after jobless claims dropped to a 4-year low adding to a string of positive economic data in the recent months.

Jobless Claims Fall to 4-year Low

Initial claims for unemployment benefits declined 14,000 to a seasonally adjusted 351,000, according to the Labor Department today. The latest claims at their lows last seen in February 2008.

Producer Prices Rise 0.4%

In a separate report released by the department showed seasonally adjusted Producer Prices Index increased 0.4% in February after rising 0.1% in January.

The wholesale prices rose 3.3% in a year to February after rising in a year to January at 4.1%. The latest increase was driven by the 4.3% rise in gasoline prices, the largest in five months and 0.1% increase in passenger car prices.

Core producer prices in 12 months to February that exclude food and energy prices rose 3% matching the increase in the previous month.

Steady Rise in Northeast Manufacturing

Federal Reserve Bank of New York indicated that its Empire State index increased to 20.21. The index tracking general business conditions rose to a new high from the previous high in June of 2010.

World Markets Advance

European indexes edged slightly higher after bond auctions by France and Spain. The International Monetary Fund is set to approve €28 billion, its share of the €130 billion second bailout package for Greece today.

Markets in Japan rallied for the third day in a row and advanced the 8-month high to a new peak after the yen fell to a 11-month low.

Cisco in $5 Billion Deal

Cisco Systems Inc said today it has agreed to acquire UK based digital-television streaming technology company for $4 billion and assume $1 billion in debt.

The digital television distribution software maker specializes in media content delivery to various devices including televisions and set-top boxes.

Cisco hopes that the acquisition will accelerate its release of Videoscape platform and increase its penetration in emerging markets.

Foreclosure Filings Drop 8%

Foreclosure filings declined 8% in February according to the data released by the RealtyTrac Inc.

The smallest monthly decline since October 2010 after 206,900 homeowners received notices of default in the month.

The filings increased in 26 states and rose 2% from January and soared 24% from a year ago.

Homeowners receiving first default notice of serious delinquency increased 1% to 58,886 properties and declined 7% from a year ago. The number of homes scheduled for auctions decreased 2% from January to 84,180 and rise 13% from a year ago.

Stock Movers

Radvision td gained 4.4% to $11.69 after it agreed to a merger with Avaya Inc for $230 million.

Guess?, Inc ((GES)) dropped 11.4% or $4.20 to $32.50 after the apparel and accessory retailer reported fourth quarter net revenue rose 3% to $775.8 million from $756.9 million in the same quarter last year.

Net earnings in the quarter decreased 12.4% to $95.9 million or $1.05 per diluted share compared to $103.3 million or $1.11 per share in the year ago.

Ross Stores, Inc. ((ROST)) decreased 2.8% or $1.60 to $54.97 after the off-price retailer reported fourth quarter net sales increased 12% to $2.40 billion from $2.15 billion in the same quarter last year. Comparable store sales for the quarter increased 7%. Net earnings in the quarter increased 19% to $192.0 million or 85 cents per diluted share compared to $161.8 million or 69 cents per share in the year ago.

Eagle Bulk Shipping dropped 11% to $1.60 after the oil tanker shipping services provider reported narrowed than expected fourth quarter loss yesterday of $1.7 million or 3 cents a share compared to a net income of $3.03 million or 5 cents a share.

Scholastic Corporation ((SCHL)) soared 13.7% or $4.43 to $36.63 after the Children’s publishing and media company reported third quarter revenue surged 22% to $467.0 million from $384.3 million in the same quarter last year. Net loss in the quarter narrowed to $3.2 million or 10 cents per diluted share compared to $25.1 million or 81 cents per share in the year ago.