U.S. Jobless Claims Drop, Fiscal Cliff Worries Linger

Arthi Gupta
06 Dec, 2012
New York City

U.S. indexes dropped on fiscal cliff worries and foreclosure sales fell in the third quarter and jobless claims declined 25,000 to 370,000. European central banks held key rates.

[R]10:25 AM New York – U.S. indexes dropped on fiscal cliff worries and foreclosure sales fell in the third quarter and jobless claims declined 25,000 to 370,000. European central banks held key rates.[/R]

U.S. indexes traded lower as lawmakers struggle to find budget compromise and jobless claims fell more than anticipated and foreclosure sales rose in the third quarter.

The European indexes edged higher despite the euro area economy slipping into a recession in the third quarter.

The European Central Bank left its key interest rate unchanged at a record low of 0.75% for the fifth straight month in December. The deposit rate also remained unchanged at zero and the marginal lending facility rate was at 1.5%.

The Bank of England retained the size of quantitative easing at £375 billion and the key interest rate unchanged at 0.50%, as expected.

The ECB President Mario Draghi continues to see downside risks to the economic outlook for the euro area.

Asian markets closed mixed.

The Reserve Bank of New Zealand retained its benchmark official cash rate unchanged at 2.5%, as expected.

Separately, the Australian unemployment rate unexpectedly dropped to a three-month low of 5.2% in November from 5.4% in October, data released by the Australian Bureau of Statistics showed today.

U.S. Jobless Claims Drop

U.S. jobless claims fell in the week ended December 1, according to a report released by the U.S. Labor Department today.

Seasonally adjusted jobless claims fell 25,000 to 370,000 from the previous week''s revised figure of 395,000. The 4-week moving average was 408,000, an increase of 2,250 from the previous week''s revised average of 405,750.

U.S. Foreclosure Sales Decline

U.S. foreclosure sales fell in the third quarter, according to RealtyTrac.

The market researcher said a total of 193,059 properties in some stage of foreclosure or bank-owned were sold during the third quarter, up 21% from the previous quarter, but down 3% from the same period last year.

The report also showed that foreclosure-related sales accounted for 19% of all U.S. residential sales during the third quarter, down from 20% in the previous quarter but the same level as in the third quarter of 2011.

Earnings Review

Canadian Imperial Bank of Commerce, the bank reported fourth quarter total revenue declined to C$3.16 billion from C$3.20 billion in the same quarter last year. Net income in the quarter rose to C$852 million or C$2.02 per share from C$757 million or C$1.79 per share in the prior-year quarter.

H&R Block, Inc. ((HRB)), the tax preparer reported second quarter total revenues grew 6% to $137.26 million. Net loss in the quarter narrowed to $105.24 million or 39 cents per diluted share from $141.72 million or 47 cents per share in the previous year.

Korn/Ferry International ((KFY)), the talent recruiter reported second quarter total revenue declined 2.5% to $204.8 million from a year earlier. Net income in the quarter plunged 92% to $1.2 million or 3 cents per diluted share from $15.1 million or 32 cents per share in the previous year.

The Men''s Wearhouse, Inc. ((MW)), the men''s apparel retailer said third quarter total net sales rose 7.9% to $631 million from the same period a year ago. Net earnings for the quarter increased to $48.8 million or 95 cents diluted earnings per share compared to net earnings of $39.9 million or 77 cents diluted earnings per share, in the same period in 2011.