U.S. Retail Sales Rise 0.2%, Time Warner Rejects Charter Offer

Nichole Harper
14 Jan, 2014
New York City

Stocks on Wall Street advanced after December retail sales were ahead of expectations and import price index was flat. JPMorgan earnings declined 7% on 2% fall in revenues. Wells Fargo reported 10% increase in earnings.

[R]2:10 PM New York – Stocks on Wall Street advanced after December retail sales were ahead of expectations and import price index was flat. JPMorgan earnings declined 7% on 2% fall in revenues. Wells Fargo reported 10% increase in earnings.[/R]

Stocks on Wall Street advanced after retail sales were ahead of expectations and better-than-expected earnings from Wells Fargo and JPMorgan Chase.

Retail Sales Jump

Retail sales increased 0.2% in December on the month after increasing 0.4% in November, Commerce Department reported today in Washington.

Seven of 13 major product categories showed an increase and the gain was led by 2% jump in grocery and beverage sales, the largest since October 2006.

Automobile purchase declined 1.8% in December, the largest monthly decline since October 2012. Excluding auto sales, retail sales in the month increased 0.7%.

For all of 2013, retail sales increased 4.2% from the previous year after rising 5.4% in 2012.

Non-store retail sales, which is dominated by Internet sales, increased 1.4% in the month following 1.6% increase in November. This was the largest two-month increase following two month increase to November 2012.

Flat Import Inflation

A separate report from the agency showed import price index, a measure of costs of goods purchased from abroad, was unchanged in December.

The index was flat after falling 0.9% in November, the first fall since August.

S&P 500 index increased 16.31 or 0.9% to 1,835.51 and the Nasdaq Composite Index gained 1.5% or 59.74 to 4,173.05.

European Markets

Stocks in Europe reversed early weakness and recovered most of the declines in major markets in the region.

Euro-zone industrial production in November increased 1.8% from the previous month and ahead of expectations of 1.4%. The industrial production increased the most in three years.

In London trading, FTSE 100 index increased 0.1% or 9.7 to 6,767 and in Frankfurt the DAX index added 0.3% or 30.35 to 9,541.

In Paris, CAC 40 index gained 10.9 or 0.3% to 4,274.

Time Warner Rejects Charter Offer

Charter Communications offered to acquire Time Warner Cable for $62.4 billion including debt. Time Warner rejected the offer and said it under values the company.

Time Warner Cable Inc ((TWC)) gained 2.7% or $3.51 to $135.91 after the cable operator rejected offer from Charter Communications Inc on Monday for $132.50 per share.

The proposal included $83 cash per share and $49.50 in stock, excluding debt the offer was valued at $37.3 billion.

Rob Marcus, Chief executive officer said in an interview yesterday $132.50 per share is “low-ball offer” and “grossly inadequate.”

Earnings in Review

Commerce Bancshares, Inc ((CBSH)) slipped 1.3% or 60 cents to $44.46 after the bank said net interest income in the fourth-quarter ending in December slumped 4% to $154.9 million.

Net income in the quarter fell 1.3% to $65.9 million or 71 cents per diluted share compared to $66.8 million or 69 cents.

JPMorgan Chase & Co ((JPM)) gained 55 cents to $58.26 after the financial service provider reported net revenue in the fourth-quarter ending in December fell 2% to $23.2 billion.

Net income in the quarter dropped 7% to $5.28 billion or $1.30 per diluted share compared to $5.69 billion or $1.39.

Wells Fargo & Co ((WFC)) slipped 32 cents to $45.24 after the brokerage company reported revenue in the fourth-quarter ending in December declined 6% to $20.7 billion.

Net income in the quarter climbed 10.2% to $5.61 billion or $1 per diluted share compared to $5.09 billion or 98 cents.

The company added loan and deposit growth for the quarter jumped to $825.8 billion and core loan portfolio increased to $39.9 billion.

Total core checking and savings deposits increased to $50.7 billion.

Non-performing assets dropped to $4.9 billion and net charge-offs declined to $963 million from $1.1 billion in the same quarter a year ago.

U.S. Stocks in Review

GameStop Corp ((GME)) plunged 18% to $37.23 after the video game retailer lowered its fourth quarter earnings outlook.

GameStop estimated same-store sales for the fourth-quarter to be at the high end of the current guidance range and fourth quarter earnings per share in the range of $1.85 to $1.95 and full-year earnings per share between $2.96 and $3.06.

Google Inc ((GOOG)) added 2% to 1,144.44 after the search engine operator agreed to acquire Nest Labs for $3.2 billion.

Nest Labs, the private company, makes “smart” thermostats and alarms for residences and the acquisition raised another set of concerns from privacy advocates.

Stratasys, Ltd ((SSYS)) plunged 11.5% to $115 after the 3-D printing company estimated lower than expected earnings but offered a strong outlook for sales.