U.S. Retail Sales Decline 0.3%, Producer Prices Fall 0.2%

Arthi Gupta
14 Nov, 2012
New York City

U.S. indexes traded higher after retail sales and producer prices declined in October. General Mills reaffirmed fiscal year 2013 earnings guidance. Staples swung to third quarter loss.

[R]11:00 AM New York – U.S. indexes traded higher after retail sales and producer prices declined in October. General Mills reaffirmed fiscal year 2013 earnings guidance. Staples swung to third quarter loss.[/R]

U.S. indexes edged modestly higher. In early morning trading, stocks rose despite disappointing domestic economic data.

The European indexes edged lower on the growing fiscal concerns in the region. Domestic economic data did not lift investor sentiment with economic growth contracting in Greece and Portugal in the third quarter.

General strikes across Europe have paralyzed the region with unions in Spain and Portugal protesting against the austerity measures.

Finance ministers of the euro area are scheduled to meet on November 20 for finalization of the next tranche of the Greek loans.

Asian markets closed higher tracking European indexes.

U.S. Retail Sales Drop

U.S. retail sales declined more than estimated in October, according to a report released by the U.S. Commerce Department today.

Retail sales adjusted for seasonality and calendar decreased 0.3% to $411.6 billion from September and increased 3.8% from a year ago.

Gasoline stations sales rose 7.7% in October and non-store retailers climbed 7.2% from last year.

U.S. Producer Prices Fall

U.S. producer prices on a seasonally adjusted basis declined 0.2% in October compared to the 1.1% increase in September, the U.S. Bureau of Labor Statistics reported today.

The index for finished energy goods fell 0.5% in October after increasing 4.7% in September.

U.S. Business Inventories Climb

U.S. business inventories rose more than expected in September, according to a report released by the U.S. Commerce Department today.

The report said business inventories increased 0.7% in September from August to $1,612.9 billion and rose 6.2% from September 2011.

Earnings Review

Abercrombie & Fitch Co. ((ANF)), the teen apparel retailer reported third quarter net sales grew 9% to $1.17 billion from the same quarter last year. Total comparable store sales for the quarter decreased 3% relative to last year.

Net income for the quarter surged 40% to $71.5 million or 87 cents per diluted share compared to net income of $50.9 million or 57 cents per diluted share a year-ago quarter.

General Mills, Inc. ((GIS)), the consumer foods manufacturer reaffirmed fiscal year 2013 adjusted diluted earnings per share guidance of approximately $2.65.

Johnson Controls, Inc. ((JCI)), the automotive interiors provider approved a 5.5% increase in the company''s quarterly cash dividend to 19 cents per common share from 18 cents per common share.

Staples, Inc. ((SPLS)), the office products supplier reported third quarter sales declined to $6.35 billion from $6.48 billion in the prior year. Net loss in the quarter swung to $569 million or 85 cents per diluted compared to net income of $324 million or 46 cents per share last year.