U.S. Stocks Up on Housing Starts, Jobless Claims

123jump.com Staff
17 Sep, 2009
New York City

Home builders edged higher after the release of home construction data. Weekly jobless claims declined 12,000 to 545,000 at the end of last week. AMR Corp raised $1 billion through credit card sale and $1.9 billion in plane lease financing.

[R]10:45 AM New York – Home builders edged higher after the release of home construction data. Weekly jobless claims declined 12,000 to 545,000 at the end of last week. AMR Corp raised $1 billion through credit card sale and $1.9 billion in plane lease financing.[/R]

U.S. stocks edged higher after the release of housing data and weekly unemployment claims. Industrials and cyclical stocks advanced as the jobless claims fell.

Housing permits in August increased 2.7% to 579,000 from the revised July rate but is still below 32.4% from a year ago. Single family permits decreased 0.2% to 462,000. Housing starts increased 1.5% to 598,000 but 29.6% lower than a year ago. Housing completion decreased 5.5% to 760,000 from July but still 25.3% below a year ago rate. Single family completion decreased 1.6% from July to 489,000.

Seasonally adjusted unemployment claims decreased 12,000 to 545,000 in the week ending Sept 12. The insured unemployment rate increased 0.1% to 4.7%. For the year so far on average 5.64 million people are collecting jobless claims.

AMR Corp gained 21.1% to $8.90 after the company raised $1 billion through the sale of frequent flier miles and arranged plane lease financing of $1.6 billion with GE Capital Aviation Services. GE will also loan additional $285 million in cash advance.

Earnings Review

Discover Financial Services, the credit card issuer and electronic payment services company reported third quarter net interest income rose 40.6% to $528.8 million from $376 million a year ago. Net income for the quarter rose 210.6% to $559.4 million or $1.07 per diluted share compared to net income of $180.1 million or 37 cents per share a year ago.

FedEx Corporation, the retailer of consumer electronics reported first quarter revenues fell 20% to $8.01 billion from $9.97 billion a year ago. Net income for the quarter fell 53% to $181 million or 58 cents per diluted share compared to net income of $384 million or $1.23 per share a year ago.

Oracle Corporation, the software maker said first quarter sales fell 5% to $5.05 billion from $5.3 billion a year ago. Net income in the quarter rose 4% to $1.12 billion or 22 cents per diluted share compared to net income of $1.08 billion or 21 cents per share a year ago.

Ratings Revisions

Peabody Energy and Patriot Coal decreased after UBS lowered the outlook citing recent price gains. ArcelorMittal fell after Societe Generale lowered the rating to “hold from “buy.”

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 173.03 or 1.68% to 10,443.80, Hang Seng index in Hong Kong increased 365.59 or 1.71% to 21,768.51 and CSI 300 index in China higher 61.86 or 1.90% to 3,320.10. ASX 200 index in Australia increased 64.50 or 1.39% to 4,714.90. The FTSE Bursa KL Composite index in Malaysia closed higher 5.82 or 0.48% to 1,218.80.

The Kospi Index in South Korea increased 12.14 or 0.72% to close at 1,695.47. SET index in Thailand closed lower 1.02 or 0.14% to 709.23 and JSE Index in Indonesia increased 17.63 or 0.72% to 2,456.99. The Sensex index in India increased 34.07 or 0.20% to 16,711.11.

Europe Markets Review

In London FTSE 100 Index traded higher 39.06 or 0.76% to 5,163.19, in Paris CAC 40 Index increased 17.09 or 0.45% to 3,830.88 and in Frankfurt DAX index traded higher 33.22 or 0.58% to 5,733.48. In Zurich trading SMI increased 38.43 or 0.61% to 6,338.34.