World Markets Rise on U.S. Economic Data

Nichole Harper
17 Jan, 2013
New York City

Market indexes in New York traded higher after the latest data on housing market and unemployment pointed to steady economic recovery. Citigroup and Bank of America reported sharp decline in earnings on mortgage loans related charges.

[R]11:05 AM New York – Market indexes in New York traded higher after the latest data on housing market and unemployment pointed to steady economic recovery. Citigroup and Bank of America reported sharp decline in earnings on mortgage loans related charges.[/R]

Stocks in New York opened higher and S&P 500 index traded near 5-year intra-day high after the latest data on housing and unemployment pointed to a steady economic recovery.

The S&P 500 index increased 5.03 to 1,477.66 and the Nasdaq Composite Index gained 11.19 to 3,128.73.

Markets in Europe traded higher the benchmark index CAC 40 in Paris gained 0.9% and DAX index in Frankfurt added 0.5%. In London, FTSE 100 index added 0.4%.

In Asian markets, Hang Seng in Hong Kong declined 0.1% and the Nikkei in Tokyo added 0.1%. Sensex in Mumbai gained 0.7%.

Weekly Jobless Claims Fall

Weekly unemployment claims filed in the last week declined by 37,000 after adjusting for seasonality to 335,000, the lowest since January 2008. The Labor Department said the weekly decline was the largest since February 2010.

The four-week moving average for initial claims declined 6,750 to 359,250.

The number of continuing claims filed with states increased 87,000 to 3.21 million in the week ended January 5.

The last time initial claims were this low was in a week in January 2008, a month after the Great Recession began and surged to more than 500,000 a week starting in November 2008 and stayed high for a year well into the financial crisis when the claims peaked to 667,000 in March 2009.

Housing Starts Soar 12%

The Commerce Department said housing starts increased 12.1% in December to annual rate of 954,000, the highest since June 2008.

Starts were helped by the surge of 20.3% in multifamily unit construction and single family starts rose 8.1%. Building permits for home construction increased 0.3% to a 903,000 annual rate, the highest since 2008.



Boeing declined 0.8% and extended the loss of 2% in last two days of trading after the United States and Japan grounded all of 787 Dreamliners after a second incident that involved a batter overheating incident.

Stocks in Review

Bank of America Corp ((BAC)) declined 36 cents to $11.42 after the bank reported 63% decline in quarterly profit of $732 million or 3 cents a share and revenues declined 25% to $18.7 billion.

The decline in net revenues was largely the result of mortgage settlements with the government and revenues would have totaled $22.6 billion otherwise. For the year 2012, net income increased to $4.2 billion from $4.1 billion

ebay Inc ((EBAY)) increased 3% or $1.53 to $54.43 after the online marketplace and payment processor reported better than expected earnings. In the fourth quarter, Ebay earned $751 million or 57 cents a share compared to $2 billion or $1.51 a share in the quarter in 2011.

Revenues in the quarter rose 18% from a year ago to $4 billion and matched analysts’ expectations. PayPal unit added five million new users and total users increased to 123 million and Paypal processed 700 million payments in the quarter.

In the quarter in 2011 the earnings were inflated because of one-time gain from the sale of online telecom service provider Skype to Microsoft.

Rio Tinto declined 2% after the company eased out its chief executive Tom Albanese because of a $14 billion write-down on aluminum and coal assets he led to acquire at the peak of the market.

The write-downs are linked to two of the largest recent acquisitions by Rio, Canada based aluminum refiner Alcan and Mozambique based coal miner Riversdale Mining.

Sam Walsh, head of the company’s iron ore unit will succeed Albanese. Doug Ritchie who helped to acquire coal assets in Mozambique also was forced out.

Rio acquired Alcan for $38 billion in 2007 and paid $4 billion to purchase Riversdale Mining for $4 billion in 2011.