After Early Dip Market Rebounds

123jump.com Staff
30 Nov, -0001
New York City

The PPI and core PPI came at a higher level than expected fueling the inflation concerns, April housing starts soared to 11% and building permits up 5.3% reversing the activity softening in March. Industrial production slides, Deere and Home Depot jump more than 3%.

PPI for April rose 0.6% after rising 0.7% in March and 0.4% in February and core index, excluding food and energy, rose 0.3%. Energy prices rose for the third month in a row and rose 2.1% in April and 3.3% in March. Gasoline prices in April rose 2.6% and natural gas prices were up 6.6%.

The index for crude energy materials rose 7.2 percent in April, following a 5.5-percent increase in March. The majority of this acceleration was due to natural gas prices, which jumped 18.1 percent after declining 1.4 percent in March. The coal index increased 2.8 percent, after posting a 0.8-percent rise a month earlier. By contrast, the index for crude petroleum fell 6.3 percent in April, subsequent to a 17.8-percent gain in March.

The report suggests that Federal Bank will keep tightening in the coming moths. The Fed had raised interest rates eight times since June 2004.

Housing starts in April rose 11% to a seasonally adjusted 2.04 million annual rate after 17.6% decline in March. Building permits were up 5.3% to 2.13 million annual rate after declining 3.4% in March.

Housing completions in April were at a rate of 1.61 million up 7.6% from adjusted March 2005.


In Other News

Britain's Yell Group announced an agreement to buy US TransWestern for $1.58 billion cash which will help the company strengthen its market positions. It posted a rise in full-year adjustment profit.

Earnings Headlines

Home Depot, the largest home improvement store chain, reported 1Q profit of 57 cents vs. 49 cents a year ago on 8% revenue growth. Excluding one time charges the profit would have been 60 cents vs. 55 cents of estimates. Same-store sales rose 2.1% in the quarter.

Zale Corp, the largest fine jewelry retailer, reported 1Q profit of 28 cents vs. 22 cents a year ago on 3% revenue growth.

Staples, office supplies retailer, reported 1Q profit of 21 cents vs. 17 cents a year ago on 13% sales increase. Same-store North American sales were up 4% with total sales were up 9%.

J.C. Penney, department store chain, reported 1Q profit of 63 cents vs. 13 cents a year ago beating the estimates by 2 cents on revenue growth of 3.9% with same-store sales growth of 3%. For the full year it raised the guidance from $2.94-$3.06 to $2.96-$3.08.

The TJX companies, off-price apparel retailer, reported 1Q profit of 30 cents vs. 32 cents a year ago with same-store sales up 3% compared to 8% year ago.

Big Lots, close out retailer, reported 1Q profit of 7 cents vs. 5 cents a year ago on same-store sales up by 2.4% and lower interest charges and 3.1% lower number of transaction. The company backed the full-year guidance.

Saks Incorporated recorded net income of $17.1 million, or $.12 per share, for the first quarter ended April 30, 2005. The quarter included a net gain of $1.4 million (net of taxes), or $.01 per share, primarily related to the disposition of closed stores. The quarter also included approximately $2.0 million (net of taxes), or $.01 per share, of expenses associated with its previously disclosed investigation of alleged improper collections of vendor markdown allowances.
Barnes & Noble, book retailer, reported 1Q profit of 13 cents vs. 16 cents a year ago on same-store sales growth of 2.2% and total sales growth of 4%. The Internet sales were down 0.6% compared to a year ago. The quarter in the last year included gain of 6 cents for the GameStop division spin-off.

Deer & Co., Farm equipment maker, reported 2Q profit of $2.43 vs. $1.88 per share on sales growth of 13%. The company plans to have 7% to 9% lower production in the second half of the year to lower the inventory levels ahead of new product launches next year.