U.S. Jobless Claims Soar, Consumer Prices Rise 0.1%

Arthi Gupta
15 Nov, 2012
New York City

U.S. indexes traded sideways after jobless claims soared and consumer prices increased. Starbucks agreed to acquire Teavana for about $620 million. Wal-Mart quarterly sales rose 3.4% to $113.2 billion.

[R]11:30 AM New York – U.S. indexes traded sideways after jobless claims soared and consumer prices increased. Starbucks agreed to acquire Teavana for about $620 million. Wal-Mart quarterly sales rose 3.4% to $113.2 billion.[/R]

U.S. indexes edged lower on the ongoing fiscal cliff worries.

Domestic economic data did not lift investor sentiment with the initial jobless claims soaring 78,000 to 439,000 and consumer prices increasing 0.1% in October.

The European indexes dropped on the deepening economic crisis in the region.

Inflation in the euro area fell in October but the French and German economy expanded in the third quarter.

Asian stocks closed lower tracking Wall Street. Japan and China were in focus.

U.S. Jobless Claims Soar

Initial jobless claims in the U.S. soared in the week ended November 10th, according to a report released by the U.S. Labor Department today.

Seasonally adjusted weekly jobless claims surged 78,000 to 439,000 from the previous week's revised figure of 361,000. The 4-week moving average was 383,750, an increase of 11,750 from the previous week's revised average of 372,000.

U.S. Consumer Prices Rise

The U.S. consumer price index increased 0.1% in October after rising 0.6% in September, according to a report released by the U.S. Labor Department.

Excluding food and energy prices, the core consumer price index rose 0.2% in October after gaining 0.1% in September.

The food index increased 0.2% in October with the index for food at home rising 0.3%, its largest increase since September 2011.

Separately, conditions for New York manufacturers declined at a modest pace in November, the Federal Reserve Bank of New York said today.

The report said the general business conditions index was negative for a fourth consecutive month, but was little changed at -5.2. The new orders index rose above zero for the first time since June, although it was only slightly positive at 3.1.

In another report, the Philly Fed said its diffusion index of current activity plunged to a negative 10.7 in November from a positive 5.7 in October, with a negative reading indicating a contraction in regional manufacturing activity.

Starbucks to Acquire Teavana

Starbucks Coffee Company agreed to acquire Teavana Holdings, Inc. for about $620 million in an all-cash acquisition. The deal is expected to close by the end of this year.

Earnings Review

PetSmart, Inc. ((PETM)), the pet supplies retailer reported third quarter total sales increased 9% to $1.6 billion. Comparable store sales, or sales in stores open at least a year, grew 6.5% in the quarter. Net earnings in the quarter rose to $82 million or 75 cents per share compared to $56 million or 50 cents per share in the third quarter of 2011.

The Children's Place Retail Stores, Inc. ((PLCE)), the children's specialty apparel retailer reported third quarter net sales increased 3% to $500.9 million from the year ago quarter. Net income for the quarter rose to $35 million or $1.44 per share from $33.7 million or $1.33 per share in the third quarter of 2011.

Wal-Mart Stores, Inc. ((WMT)), the retail stores operator reported third quarter net sales rose 3.4% to $113.2 billion. Net income in the quarter climbed to $3.64 billion or $1.08 per share from $3.34 billion or 96 cents per share in the same quarter last year.

Williams-Sonoma, Inc. ((WSM)), the home goods company reported third quarter net revenues increased 8.9% to $945 million. Comparable store sales for the quarter increased 2.9%. Net profit improved to $48.9 million or 49 cents per share from $43.4 million or 41 cents per share last year.