U.S. Jobless Claims Drop, Retail Sales Rise

Arthi Gupta
13 Dec, 2012
New York City

The U.S. indexes traded sideways after jobless claims declined 29,000 to 343,000, retail sales rose, and producer prices fell in November. Sprint Nextel bids for Clearwire shares that it does not own for $2.1 billion.

[R]11:30 AM New York – The U.S. indexes traded sideways after jobless claims declined 29,000 to 343,000, retail sales rose, and producer prices fell in November. Sprint Nextel bids for Clearwire shares that it does not own for $2.1 billion.[/R]

Stocks wavered in the early trading and jobless claims declined to a 9-month low and retail sales rose in November as consumers snapped up auto and other durable goods.

Yesterday, the U.S. Federal Reserve said it would keep buying bonds until the labor market improves significantly. Fed also indicated that it plans to keep short term rates near zero as long as unemployment rate stayed above 6.5%.

The European indexes edged lower and finance ministers approved the European banking union. At least 150 large and multinational banks will be placed under a single supervisory authority controlled by the European Central Bank and if needed the new authority will be empowered to monitor all 6,000 banks in the region. UK and Sweden will not be part of the union.

The Eurogroup formally approved the second disbursement for Greece after reviewing the outcome of the debt buy back operation conducted by the government.

The Eurogroup authorized the European Financial Stability Facility to release the next instalment for a total amount of €49.1 billion. The disbursement will be made in several tranches. Greece will receive €34.3 billion in the following days and the remaining amount will be disbursed in the first quarter of 2013.

U.S. Jobless Claims Drop

Seasonally adjusted weekly jobless claims declined 29,000 to 343,000 in the week ended December 8 from the previous week''s revised figure of 372,000, according to a report released by the Labor Department today.

The 4-week moving average was 381,500, a decrease of 27,000 from the previous week''s revised average of 408,500.

U.S. Retail Sales Rise

U.S. retail and food services sales for November, adjusted for seasonal variation and holiday and trading-day differences, were $412.4 billion, an increase of 0.3% from the previous month and 3.7% above November 2011.

Retail trade sales rose 0.2% from October and 3.4% above last year. Non-store retailers were up 11.1% from November 2011.

U.S. Producer Prices Fall

The U.S. producer price index fell 0.8% in November following a 0.2% decline in October, according to the Labor Department report released today, driven by a sharp drop in energy prices, which fell 4.6% in November.

In another report, business inventories in the U.S. rose 0.4% in October to $1,619.2 billion following a 0.7% increase in September.

Sprint Nextel Bids for Clearwire

Sprint Nextel Corp. plans to acquire shares of Clearwire Corp. that it does not already own for $2.90 per share totaling $2.1 billion. In late October, Sprint had raised its stake in Clearwire to 50.8%.

Earnings Review

Ciena Corporation ((CIEN)), the network specialist reported fourth quarter revenue rose to $465.5 million as compared to $455.5 million for the fiscal fourth quarter 2011. Net loss for the quarter widened to $38.8 million or 39 per diluted share compared to a net loss of $22.33 million or 23 cents per share in the prior-year quarter.

Fiscal year revenue gained to $1.8 billion as compared to $1.7 billion for fiscal year 2011. For the full year, net loss narrowed to $144 million or $1.45 per common share compared to a net loss of $195.5 million or $2.04 per common share for fiscal year 2011.

Hovnanian Enterprises, Inc. ((HOV)), the home builder reported fourth quarter total revenues rose 42.6% to $487 million from the comparable period last year. Net loss in the quarter narrowed to $84.4 million or 59 cents per diluted share compared with a net loss of $98.3 million or 90 cents per share last year.

Pier 1 Imports, Inc. ((PIR)), the decorative home furnishings and gifts retailer said third quarter net sales grew 10.9% to $424.53 million. Net income for the quarter increased to $23.69 million or 22 cents per diluted share from $22.99 million or 21 cents per share in the previous year.

Teleflex Incorporated ((TFX)), the medical technology products provider reaffirmed its previously provided 2012 adjusted diluted earnings per share from continuing operations range of $4.35 to $4.40.