Unemployment Slightly up

Elena
09 Feb, 2006
New York City

Asian benchmarks rebounded from Wednesday losses to finish largely higher with the Nikkei in the lead rising 1.03%, followed by South Korean Kospi, up 0.8%, and Australia All Ordinaries, up 0.9%. European averages gained ground with the German DAX 30 and London FTSE 100 climbing 0.7%. In earnings news, Aetna reported Q4 income rise of $1.42 a share on 14% revenue growth, beating forecasts of $1.23 a share. Marriott reported 25% profit growth in Q4 on 16% higher revenue, beating forecasts.

U.S. MARKET AVERAGES

U.S. stock futures slightly advanced early Thursday, pointing to a positive start on strong gains posted yesterday and General Motors, Morgan Stanley and Oracle expected to draw investors’ attention with personnel moves. On Wednesday stocks reversed from recent losses and the Dow recorded a gain of 110 points on a rally spurred by Pfizer and upbeat earnings from Cisco.

Oracle, software giant, is expected to announce more than 1,000 job cuts Thursday alongside its quarterly earnings.

Morgan Stanley, investment bank, may attract attention after naming Zoe Cruz and Robert Scully as co-presidents late Wednesday.

Talks between General Motors, Delphi Corp and the United Auto Workers union on job cuts at Delphi have stalled.

In corporate news, Research In Motion ((RIMM)) developed and tested software for its BlackBerry handsets that would allow the devices to work even if a court implemented an injunction as part of its patent litigation with NTP. The company said that it remains pragmatic and reasonable in its willingness to reach a settlement that would generously compensate NTP.

On the economic data front, weekly jobless claims are seen rising to 283,000 from 273,000, while wholesale inventories are seen growing 0.5% in December after rising 0.4% in the previous month.

One noteworthy event that will get attention on Thursday will be the return of the 30-year bond with the auction taking place in the early afternoon.

Dow Jones futures were recently higher 12 points, S&P 500 futures rose 1.7 points, and Nasdaq 100 futures added 3.0 points.

ECONOMIC NEWS

The Department of Labor released its report on initial jobless claims in the week ended February 4 on Thursday, showing that jobless claims rose much less than expected. The report also showed that the 4-week moving average fell to its lowest level in almost six years.

The Labor Dept. said that jobless claims rose to 277,000 from the previous week's unrevised figure of 273,000. Economists had been expecting jobless claims to rebound to 285,000 after showing notable declines in recent weeks.

The report also showed a continued decline by the less volatile 4-week moving average, which fell to 276,500 from the previous week's unrevised average of 284,250. With the decrease, the moving average fell to its lowest level since April of 2000.

Additionally, the report showed that continuing claims rose to 2.557 million in the week ended January 28 from the preceding week's revised level of 2.497 million.

INTERNATIONAL MARKETS NEWS

Asian-Pacific benchmarks recovered from Wednesday’s sharp declines to finish largely in the positive, following the Bank of Japan decision to hold rates steady. Strength on Wall Street also lifted optimism. The Nikkei led gainers, rising 1.03%. Across the region, Australia’s All Ordinaries climbed 0.9%, South Korea’s Kospi rose 0.8%, and London’s FTSE 100 gained 0.3%.

European stocks gained ground Thursday, helped by strong gains on Wall Street and positive earnings news from BT Group and Unilever. The German DAX 30 climbed 0.7%, the French CAC 40 advanced 0.6%, and London’s FTSE 100 gained 0.7%.

OIL, METALS, CURRENCIES

Crude oil prices gained, reversing from recent heavy losses. Light sweet crude for March delivery advanced 53 cents to $63.08 a barrel. London Brent rose 41 cents to $61.41.

European gold traded higher, recovering from yesterday’s declines. In London gold advanced to $559 bid per troy ounce, up from $550. In Zurich the precious metal traded at $558, up from $551.10. In Hong Kong gold climbed $7.30 to close at $556.40. Silver opened up at $9.47, up from $9.40.

The U.S. dollar declined against other major currencies. The euro was quoted at $1.1976, up from $1.1969. The dollar bought 118.42 yen, down from $118.53. The British pound stood at $1.7414, up from $1.7392.

EARNINGS NEWS

Aetna Inc, ((AET)), health care company, reported Q4 net income of $1.42 a share, up from 98 cents in the year-ago period on 14% revenue growth, topping analyst forecasts of $1.23 a share. Operating earnings on an adjusted basis were $1.26 a share for Q4, up from the prior year's 91 cents. Aetna raised its financial forecast on stronger projected membership growth.

Marriott International, ((MAR)), hotel chain, reported a 25% rise in Q4 net income to $1.07 a share on a 16% revenue growth, beating analyst estimate of 98 cents a share. Revenue per available room rose 11.2% during the quarter.

Watson Wyatt Worldwide Inc, ((WW)), management consulting firm, reported that Q2 net income climbed 55.4% to 41 cents a share on 79.8% revenue growth, due to the acquisition of the consulting operations from its European partner Watson Wyatt LLP, along with growth in the technology and human capital consulting sectors. The company topped analysts’ estimate of 42 cents a share.

Rural/Metro Corp, ((RURL)), emergency services provider, reported Q2 earnings of 11 cents a share, down from 13 cents a share in the same period a year earlier despite 12% revenue growth. The provision for doubtful accounts as a percentage of revenue increased to 17.7% from 15.5%.

EarthLink Inc, ((ELNK)), internet service provider, reported Q4 profit of 22 cents a share, down a penny from 23 cents a year ago revenue decline, beating analysts’ forecasts of 21 cents a share.

Timberland Co, ((TBL)), footwear and apparel company, reported that Q4 net income advanced to 71 cents a share, from 64 cents a share in the same period a year ago. The results included pre-tax costs of $1.7 million related to the previously disclosed restructuring of its Caribbean manufacturing facilities. If not for these restructuring charges earnings were 73 cents a share, beating analyst estimate of 62 cents a share.

Coca-Cola Enterprises Inc, ((CCE)), soft drink distributor, reported a Q4 loss of 12 cents a share, down from a year-ago profit of 17 cents a share, missing analyst estimate of 15 cents a share. The results include a charge of 27 cents a share, related to the repatriation of foreign earnings. If not for items, the company earned. Revenue increased 2% in Q4.

Central Parking Corp, ((CPC)), parking facilities company, reported Q1 earnings of 54 cents a share, up from 8 cents a share in the same period a year earlier despite revenue decline. If not for discontinued operations, earnings would have been 51 cents a share.