Stocks Rally on Jobless Claims Data and 4-year High Confidence

Nichole Harper
01 Nov, 2012
New York City

Market indexes in New York jumped more than 1% after weekly jobless claims declined and manufacturing growth increased in October. Construction spending rose to a three-month high and consumer confidence increased to the highest in four years.

[R]11:55 AM New York – Market indexes in New York jumped more than 1% after weekly jobless claims declined and manufacturing growth increased in October. Construction spending rose to a three-month high and consumer confidence increased to the highest in four years.[/R]

Stocks in New York traded sharply higher as communication and transportation networks recover in the East Coast.

Trading was still light on exchanges in New York as several traders and employees struggled to reach to work for the second day in the aftermath of Hurricane Sandy.

In the early morning, investors digested weekly jobless claims, manufacturing growth estimate, consumer confidence index reading and the construction spending data.

Weekly jobless claims decreased 9,000 to a seasonally adjusted 363,000 in the previous week according to the latest data released by the Labor Department.

Separately, private sector added 158,000 jobs in October, according to employment data reported in a private survey released by ADP, using its revised methodology.

Construction spending increased 0.6% in September to an annual rate of $851.6 billion and reached a 3-month high according to the Commerce Department data released today.

In the news on the economy, U.S. manufacturing sector growth increased to 51.7 in October from 51.5 in September on the rising new orders, according to the Institute of Supply Management.

Consumer confidence index increased to 72.2 in October from the downwardly revised 68.4 in September, the highest in four years, according to the Conference Board

In European trading market indexes gained following the surge in New York trading and regional earnings were ahead of expectations. The benchmark index in UK, Germany and France added more than 1.3%.

In Asian markets, indexes in Hong Kong gained more than 0.8% after China reported first monthly increase in manufacturing sector in three months but confirmed the slowing economic activities for a year.

Corporate earnings in Japan were weaker than expected. Sony, TDK, Sharp and Panasonic reported worse than expected results. Panasonic revised its loss for the current fiscal year to a large loss and Sony reported its seventh quarterly loss in a row.

Earnings Review

Cigna Corporation ((CI)) climbed 2.9% or $1.49 to $52.49 after the health service provider said revenue in the third quarter ending in September surged 31% to $7.36 billion from $5.61 billion in the same period of last year. Net income in the quarter jumped 155% to $466 million or $1.61 a diluted share compared to $183 million or 67 cents a share a year ago.

Cigna now estimates full year consolidated adjusted income from operations in the range of $1.66 billion to $1.71 billion or $5.70 to $5.90 per share.

Exxon Mobil Corporation ((XOM)) slid 26 cents to $90.91 after the petrochemicals company reported total revenues in the third quarter ending in September slipped 8% to $115.71 billion from $125.33 billion in the same period of last year. Net income in the quarter slumped 7% to $9.57 billion or $2.09 a diluted share compared to $10.33 billion or $2.13 a share a year ago.

Ford Motor Company ((F)) announced that president and chief executive Alan Mullaly will remain at the company through “at least 2014” and Mark Fields will be promoted to chief operating officer.

Separately, Ford said U.S. auto sales in October increased 0.4%, lower than the estimate of 3.5% increase.

General Motors sales in the month increased 4.8% and Toyota Motor sales increased 15.8%.

Pfizer Inc. ((PFE)) decreased 1.2% or 32 cents to $24.55 after the biopharmaceutical company reported revenues in the third quarter ending in September dropped 16% to $13.98 billion from $16.61 billion in the same period of last year. Net earnings in the quarter declined 14% to $3.21 billion or 43 cents a diluted share compared to $3.74 billion or 48 cents a share a year ago.

The company lowered its revenues guidance for the fiscal 2012 to a range between $58 billion and $59 billion from earlier guidance of $58 billion to $60 billion and lifted diluted earnings per share to a range of $1.30 to $1.38 compared to previous guidance of $1.21 to $1.36.

Visa Inc. ((V)) jumped 2.9% or $4.18 to $142.94 after the payment network operator said net revenue in the fourth quarter ending in September jumped 15% to $2.73 billion from $2.38 billion in the same period of last year. Net income in the quarter soared 89% to $1.66 billion or $2.47 a diluted share compared to $880 million or $1.27 a share a year ago earlier.