U.S. Jobless Claims Fall, Trade Deficit Narrows

Arthi Gupta
08 Nov, 2012
New York City

U.S. indexes advanced and trade deficit narrowed in September to a 2-year low and jobless claims fell unexpectedly by 8,000 to 355,000 after the Superstorm Sandy disrupted businesses and distorted data. Wendy''s third quarter loss widened.

[R]10:45 AM New York – U.S. indexes advanced and trade deficit narrowed in September to a 2-year low and jobless claims fell unexpectedly by 8,000 to 355,000 after the Superstorm Sandy disrupted businesses and distorted data. Wendy''s third quarter loss widened.[/R]

U.S. indexes gained after better than anticipated jobless data and September trade deficit dropped to a 2-year low however gap with China widened.

European Central Bank and Bank of England held rates and bond buying programs but Spain resisted calls for wider bailout.

The European indexes edged higher after the European Central Bank held its key interest rate unchanged at a record low of 0.75% for the fourth consecutive month.

European Central Bank President Mario Draghi said at a press conference today that the euro area growth momentum is expected to remain weak next year.

He also reinforced the idea that the bank is ready to undertake Outright Monetary Transactions, which will help to avoid extreme scenarios and provide unlimited liquidity.

U.S. Jobless Claims Fall

Seasonally adjusted weekly jobless claims in the U.S. decreased 8,000 to 355,000 from the previous week''s unrevised figure of 363,000 in the week ending November 3.

The 4-week moving average was 370,500, an increase of 3,250 from the previous week''s unrevised average of 367,250.

The weekly numbers are likely to be volatile for several weeks as the Superstorm Sandy disrupted several businesses and distorted data collection.

A Labor Department analyst indicated that the storm’s effect is likely to be temporary and the storm boosted claims in some states but also prevented the data collection because of power outages.

U.S. Deficit Narrows

The U.S. trade deficit narrowed in September and declined to the smallest gain since December 2010, according to the U.S. Commerce Department report released today.

Exports increased 3.1% $187 billion and imports gained 1.5% to $228.5 billion with deficit of $41.5 billion in September, down from a revised deficit of $43.8 billion in August. The goods and services deficit decreased $2.9 billion from a year ago month.

Trade deficit with China expanded to $29.1 billion from $28.7 billion in the month earlier and average price of imported oil increased to $98.88 a barrel, but the total quantity of oil fell.

Earnings Review

Advance Auto Parts, Inc. ((AAP)), the automotive aftermarket parts retailer reported third quarter total sales decreased 0.5% to nearly $1.46 billion. Net income decreased to $89.50 million or $1.21 per diluted share from $105.55 million or $1.41 per share the prior year.

Dillard''s, Inc. ((DDS)), the fashion apparel, cosmetics, and home furnishings retailer reported third quarter net sales rose to $1.450 billion from $1.383 billion last year. Net income for the quarter plunged to $48.5 million or $1.01 per share from $228.2 million or $4.31 per share in the comparable quarter last year.

Kohl''s Corporation ((KSS)), the department store chain reported third quarter net sales climbed 2.6% to $4.49 billion. Comparable store sales for the quarter increased 1.1%. Net income for the quarter grew to $215 million or 91 cents per diluted share from $211 million or 80 cents per diluted share a year ago.

The Wendy''s Company ((WEN)), the fast food restaurant operator reported third quarter consolidated revenues grew 4.1% to $636.3 million from last year. Net loss for the quarter widened to $26.16 million or 7 cents per diluted share compared to a net loss of $3.97 million or 1 cent per share in the prior-year quarter.