Wall Street Indexes Gain 1% on Earnings and Jobless Claims Data

Nichole Harper
06 Feb, 2014
New York City

U.S. indexes advanced after investors shifted attention to earnings and weekly jobless claims were lower than expected. European Central Bank left its reference rate at record low of 0.25%.

[R]11:35 AM New York – U.S. indexes advanced after investors shifted attention to earnings and weekly jobless claims were lower than expected. European Central Bank left its reference rate at record low of 0.25%. U.S. trade deficit widened in December but narrowed for 2013.[/R]

Stocks on Wall Street advanced after earnings were ahead of expectations and weekly jobless claims were lower than expected.

S&P 500 index increased 1% or 17.59 to 1,769.28 and the Nasdaq Composite Index added 49.31 or 1.2% to 4,060.68.

Weekly Jobless Claims Fall

Weekly jobless claims declined 20,000 to 331,000 in the week ending February 1, the Labor Department reported today in Washington. The consensus estimate for the decline was a decline to 335,000.

The Labor Department is scheduled to report January job gains and jobless rates estimated in two separate surveys.

Economists are estimating government and businesses are expected to increase 188,000 employees after 87,000 increase in December.

U.S. Trade Deficit Widens

The U.S. trade deficit widened 12% to $38.7 billion in December, according to data released by Commerce Department in Washington today. November trade gap was revised to $34.6 billion from the previous estimate of $34.3 billion.

Exports in the month declined 1.8% from the previous month to $191.3 billion and imports increased 0.3% to $230 billion on the increase shipment of consumer goods and crude oil.

For 2013, the trade deficit narrowed 11.8% to $471.5 billion and trade deficit with China, the second largest economy in the world, widened to a record $318.4 billion on record imports and exports.

European Markets

The European Central Bank kept interest rate on hold today and noted the ongoing global market turmoil and emerging markets currencies’ weakness and said the bank is prepared to act if prices weaken further.

The central bank held its main rate at a record low of 0.25% for the third month in a row. Inflation in January fell more than expected and President Mario Draghi said bank needs more time to understand the reasons for the decline.

FTSE 100 index increased 1.6% or 102.1 to 6,560 and DAX index increased 1.5% or 135.3 to 9,252. CAC 40 index added 1.8% or 75.1 to 4,193.

U.S. Stocks in Review

Dunkin Brands Group Inc ((DNKN)) soared 6.5% to $50.38 after the operator of Dunkin’ Donnuts and Baskin-Robbins restaurant chains reported adjusted earnings per share of 43 cents, ahead of consensus estimate of 40 cents.

General Motors ((GM)) declined 2% to $34.78 after the largest U.S. automaker reported profits that fell short of expectations on higher costs in Asia except China and the restructuring costs in Europe trimmed earnings.

Green Mountain Coffee Roasters Inc ((GMCR)) soared 27% to $103.20 after Coca Cola Company agreed to take 10% stake in the company. Coca-Cola gained 1.2% to $38.05 after the investment announcement.

Sodastream International Ltd gained 6% to $38 on the speculation that the company may strike a similar deal with other large beverage makers.

Pandora Media Inc ((P)) dropped 9% to $32.60 after the online streaming service provider reported fourth quarter earnings per share of 11 cents and $200 million in revenues. The company also forecasted less than expected first-quarter earnings.

Twitter Inc ((TWTR)) plunged 21% to $52.38 after the social networking site reported fourth quarter earnings per share of 2 cents on $243 million in revenues. The earning were ahead of expectations but new monthly active users jumped less than expected 30% to 241 million.

The Walt Disney Company ((DIS)) increased 5% to $75.26 after the resort and entertainment company reported better than expected earnings on the success of its animation unit.

December quarter earnings increased 33% to $1.8 billion.