U.S. Jobless Claims at 4-Year Low, European Worries Drag Stocks

Arthi Gupta
05 Apr, 2012
New York City

U.S. indexes traded lower despite weekly jobless claims drop to 4-year low and bond yields in Europe rose for the second day in a row. ConocoPhillips approved spin-off of its downstream businesses.

[R]10:10 AM New York – U.S. indexes traded lower despite weekly jobless claims drop to 4-year low and bond yields in Europe rose for the second day in a row. ConocoPhillips approved spin-off of its downstream businesses.[/R]

U.S. indexes struggled in early trading after bond yields gained for the second day in a row in Europe and domestic weekly jobless claims were ahead of expectations.

Chain stores retailers reported mixed March sales as consumers responded to selective discounts and battled record retail gasoline prices.

European market edged lower after UK manufacturing production unexpectedly fell and German industrial output decreased more than estimated in February and rising bond yields rattled investors.

France raised €8.4 billion from a bond sale today at slightly higher borrowing costs.

The Bank of England retained the benchmark interest rate at its record low level of 0.50% and maintained the size of its bond purchases unchanged at £325 billion.

Asian markets declined on the worsening situation in Europe with most indexes closing lower. The Nikkei declined for the third day in a row and the Australian dollar eased for the fifth week in a row.

U.S. Weekly Jobless Claims Drop

New U.S. claims for unemployment benefits declined to the lowest levels in almost four years, according to data released by the U.S. Labor Department today.

Seasonally adjusted weekly jobless claims for the week ended March 31st decreased 6,000 to 357,000 from the previous week''s revised figure of 363,000.

The report also showed that the less volatile four-week moving average edged down to 361,750 from the previous week''s revised average of 366,000.

ConocoPhillips to Spin-off Downstream Unit

ConocoPhillips approved the spin-off of its downstream businesses. The upstream company will keep the ConocoPhillips name and the downstream company will be named Phillips 66.

Callaway Sells Top-Flite Brand to Dick''s Sporting

Callaway Golf Company announced the sale of the Top-Flite brand to Dick''s Sporting Goods, Inc. as the company sharpens its focus to the core businesses.

Earnings Review

Bed Bath & Beyond Inc. ((BBBY)), the home furnishing retailer said fourth quarter net sales rose 9.1% to $2.73 billion from $2.50 billion in the same quarter last year. Comparable store sales in the quarter increased approximately 6.8% compared with an increase of approximately 8.5% in last year''s fiscal fourth quarter.

Net income in the quarter rose 24% to $351.0 million or $1.48 per diluted share compared to net income of $283.5 million or $1.12 per share for the year-ago quarter.

For fiscal year 2011, the company reported net sales rose 8.5% to $9.500 billion from net sales of approximately $8.759 billion in the prior fiscal year. Comparable store sales for fiscal 2011 increased by approximately 5.9% compared with an increase of approximately 7.8% in last year.

Net earnings for the year increased 25% to $989.5 million or $4.06 per diluted share compared to net earnings of $791.3 million or $3.07 per diluted share a year ago.

CarMax, Inc. ((KMX)), a retailer of used vehicles reported fourth quarter net sales and operating revenues increased 10% to $2.48 billion from $2.25 billion in the last year. Comparable store used unit sales increased 4% compared to a 12% increase in last year''s fourth quarter.

Net earnings for the quarter increased 7% to $95.03 million or 41 cents per diluted share compared to net earnings of $88.75 million or 39 cents per share in the prior year quarter.

For the fiscal year, net sales and operating revenues increased 11% to $10.00 billion from $8.98 billion in fiscal year 2011. Comparable store used unit sales increased 1% in the fiscal year.

Fiscal year 2012 net earnings increased 10% to $413.8 million or $1.79 per diluted share, compared with $377.5 million or $1.65 per diluted share, in fiscal 2011.

Costco Wholesale Corporation ((COST)), the membership warehouse club chain reported net sales increased 10% to $9.13 billion for March from $8.33 billion during the similar period last year on comparable sales growth of 6%.

PriceSmart, Inc. ((PSMT)), an operator of membership warehouse clubs said second quarter revenues rose 22% to $549.8 million compared to $449.6 million in the comparable period of the prior year. Net income in the quarter climbed 13% to $20.2 million or 67 cents per diluted share compared to net income of $17.9 million or 60 cents per diluted share a year-ago quarter.