U.S. Import Prices Fall, Markets Higher on Fed Expectations

Arthi Gupta
12 Dec, 2012
New York City

The U.S. indexes climbed ahead of Fed announcement and import prices fell in November. Chesapeake agreed to sell remaining midstream assets to Access Midstream for $2.16 billion. Costco quarterly net surged 30%.

[R]9:40 AM New York – The U.S. indexes climbed ahead of Fed announcement and import prices fell in November. Chesapeake agreed to sell remaining midstream assets to Access Midstream for $2.16 billion. Costco quarterly net surged 30%.[/R]

U.S. indexes traded sideways ahead of the policy statement from the Federal Reserve.

Investors are optimistic that the central bank will announce another round of bond buying to support the economic growth and lower unemployment.

The Fed is scheduled to release its estimate of economic growth, unemployment, inflation and interest rate direction later today.

U.S. import prices fell more than estimated in November.

The European and Asian indexes advanced and extended the 3-week rally on the improving economic data from China and rising resource prices.

Japan’s core machinery orders rose 2.6% from a month ago in October following a 4.3% decline in September. Annually, machinery orders rose 1.2% in October.

U.S. Import Prices Drop

U.S. import prices decreased 0.9% in November, the U.S. Bureau of Labor Statistics reported today, following increases in each of the three previous months. The decline was primarily led by lower fuel prices.

The price index for U.S. exports also fell in November, decreasing 0.7% after remaining unchanged in October.

Chesapeake to Sell Midstream Assets

Chesapeake Energy Corporation agreed to sell a substantial majority of its remaining midstream assets to Access Midstream Partners, L.P. for approximately $2.16 billion.

These midstream assets are located primarily in the company’s Marcellus, Utica, Eagle Ford, Haynesville and Niobrara shale plays.

United Technologies to Sell Pratt & Whitney Power Systems Unit

United Technologies Corp. agreed to sell its Pratt & Whitney Power Systems unit, currently part of Pratt & Whitney, to Mitsubishi Heavy Industries. Terms of the agreement were not disclosed and the transaction is expected to close in the second quarter of 2013.

Earnings Review

Charles River Laboratories International, Inc. ((CRL)), the solutions provider estimates fiscal year earnings per share in a range of $2.45 to $2.55.

Costco Wholesale Corporation ((COST)), the membership warehouses operator reported first quarter net sales grew 9.6% to $23.2 billion. Net income for the quarter increased 30% to $416 million or 95 cents per diluted share from $320 million or 73 cents per share in the previous year.

Joy Global Inc. ((JOY)), the mining equipment maker reported fourth quarter net sales increased 19% to $1.6 billion compared to the same period last year. Net income for the quarter rose to $212.56 million or $1.99 per diluted share compared to net income of $172.35 million or $1.62 per share in the prior-year quarter.

3M Company ((MMM)), the diversified technology company anticipates 2013 earnings per share to be in the range of $6.70 to $6.95 and sales in organic local-currency to grow between 2% to 5%.