Wall Street at 5-Year High, Jobless Claims Drop to 5-Year Low

Nichole Harper
24 Jan, 2013
New York City

Stocks in New York reversed early morning weakness and extended gains. Apple results weighed on the market after it reported flat earnings and issued a cautious outlook. Nokia drops dividend. Japanese trade deficit surges on higher energy imports.

[R]11:15 AM New York – Stocks in New York reversed early morning weakness and extended gains. Apple results weighed on the market after it reported flat earnings and issued a cautious outlook. Nokia drops dividend. Japanese trade deficit surges on higher energy imports.[/R]

Stocks opened lowered but reversed the early declines and traded higher after jobless claims report showed another decline.

Tech stocks were under pressure after Apple Inc reported flat earnings and issued a cautious outlook.

Jobless claims filed at the end of last week declined for the second week in a row and dropped to the lowest in five years.

Initial claims for the jobless benefits decreased 5,000 last week to 330,000 from the 335,000 in the previous week, lowest in 2008.

In the last two weeks, the claims declined 45,000 and economists point to season factors that drive the data every January.

Continuing claims, a measure of unemployed for the second week totaled 3.16 million in the week ending on Jan 12, a 71,000 drop from the previous week.

Markets in Asia traded mixed after Nikkei index in Tokyo halted a 3-day decline after Chinese manufacturing survey showed an expansion. Trade deficit in Japan surged three-fold to $78.3 billion in 2012 after yen strengthened and import of oil and natural gas surged.

Markets in Europe declined after Nokia swung to profit but suspended the dividend and private sector activities in the euro zone contracted at the slowest pace in 10-months. Also, business activities in Germany rose at the quickest pace in a year in January.

Stocks in Review

In stock trading, 3M declined 0.5% after it reported revenues that met expectations and reaffirmed its 2013 earnings outlook.

Xerox gained more than 4% after it reported fourth quarter earnings that were ahead of expectations and confirmed its 2013 earnings outlook.

Swift Transportation surged 13% after it reported fourth quarter earnings that were ahead of expectations.

Apple Inc. ((AAPL)) plunged 11.3% or $58.47 to $455.72 after the mobile and media device maker said total revenue in the first quarter ending on December 29 soared 18% to $54.51 billion from $46.33 billion in the same period of last year. Net earnings in the quarter were nearly flat at $13.08 billion or $13.81 per diluted share compared to $13.06 billion or $13.87 a share a year ago.

Apple said gross margin declined 38.6% from 44.7% in the year ago period but sold record 47.8 million iPhones and 22.9 million iPads compared to 37 million and 15.4 million respectively from a year ago. Sales of iPods declined to 12.7 million compared to 15.4 million in the year ago quarter.

Netflix, Inc. ((NFLX)) surged 40.8% or $42.23 to $145.49 the broadcasting and cable TV operator stated total sales in the fourth quarter ending in December grew 2% to $945.3 million from $875.6 million in the same period of last year. Net income in the quarter declined 77% to $8 million or 13 cents per diluted share compared to $35.2 million or 64 cents a share a year ago period.