U.S. Import Prices Rise; Stocks Rebound Sharply

Arthi Gupta
11 Apr, 2012
New York City

U.S. indexes reversed to gains on Wednesday and import prices rose more than estimated in March. Alcoa quarterly net plunged 69% but surprised investors with a profit. Owens-Illinois jumped 10% after it lifted earnings outlook.

[R]10:45 AM New York – U.S. indexes reversed to gains on Wednesday and import prices rose more than estimated in March. Alcoa quarterly net plunged 69% but surprised investors with a profit. Owens-Illinois jumped 10% after it lifted earnings outlook.[/R]

U.S. indexes edged higher after Alcoa posted a surprise profit last evening and better-than-estimated import prices.

European indexes rebounded from a two-month low but German bond auction failed to meet its target and bond yields fell to a new low in the year. Market indexes in Spain and Italy rebounded after falling sharply on Tuesday but industrial production in February plunged 5.1% in Spain.

German luxury automakers reported strong monthly sales on stable domestic demand.

Nokia Corp. plunged 16.7% after it cut outlook for the first quarter.

Investors were on alert after an 8.7 magnitude earthquake struck off the west coast of Northern Sumatra in Indonesia today, triggering a tsunami alert for 28 countries across the Indian Ocean region including India.

Asian stocks declined for the sixth day after Sony and Sharp widened net loss forecast for the fiscal year and the rising yen knocked off stocks in Tokyo trading for seventh day in a row and the benchmark index fell more than 6%.

U.S. Import Prices Rise

U.S. import prices rose 1.3% in March, driven by higher prices in both the fuel and non-fuel sectors, according to data released by the U.S. Department of Labor today, the largest monthly increase since April of 2011.

Imported fuel prices surged 3.8% percent, and non-fuel import prices rose 0.5%.

Yahoo Plans Organizational Changes

Chief Executive Officer of Yahoo! Inc. CEO Scott Thompson said the company will now focus on consumer, regions and technology as well as renew its focus on commerce rather than the ""traditional e-commerce.""

The media portal is battling losing market share, falling revenue growth and staff defections and the company is expected lay off more thousands in the next one year as it battles shareholder proxy fight.

Earnings Review

Adtran, Inc. ((ADTN)), the networking and communications equipment provider reported first quarter total sales fell 18.6% to $134.74 million from $165.52 million in the same quarter last year. Net income in the quarter slumped 62% to $12.96 million or 20 cents per diluted share compared to net income of $34.26 million or 52 cents per share in the year-ago quarter.

Alcoa, Inc. ((AA)), the aluminum producer said first quarter sales rose 0.8% to $6.01 billion from $5.96 billion in the same quarter last year. Net income in the quarter plunged 69% to $94 million or 9 cents per diluted share compared to net income of $308 million or 27 cents per share for the year-ago quarter.

Chevron Corporation ((CVX)), the energy corporation estimates first quarter 2012 earnings to be higher than fourth quarter 2011, driven by rising oil prices and improving refining margins.

The Progressive Corporation ((PGR)), the insurance holding company said net income for March declined 44% to $76.3 million or 13 cents per diluted share compared to $136.2 million or 21 cents per share last year.

For the first quarter, net income fell 41% to $257.6 million or 42 cents per diluted share compared to $362.9 million or 55 cents per share in the prior-year quarter.