A Rise in Jobless Claims Worries U.S. Stocks

123jump.com Staff
22 Oct, 2009
New York City

U.S. stocks fell in the morning trading after weekly jobless claims increased. Beige Report painted weak economic outlook and indicated patchy and uneven recovery. Quarterly reports released at most companies today indicated weak sales and falling earnings.

[R]10:30 AM New York – U.S. stocks fell in the morning trading after weekly jobless claims increased. Beige Report painted weak economic outlook and indicated patchy and uneven recovery. Quarterly reports released at most companies today indicated weak sales and falling earnings.[/R]

U.S. stocks in the early trading edged lower after crude oil, gold and natural gas fell. Dollar hovered near its recent lows. Jobless claims increased in the last week and the Beige Report painted patchy recovery in the weak economic environment.

eBay Inc, NCR Corp and Terex Corp and TriQuint Semiconductor Inc dropped after reporting weaker than expected earnings.

Seasonally adjusted weekly jobless claims increased 11,000 to 531,000 from the revised previous week claims of 520,000. The preliminary unemployment rate in the week ending October 10 decreased 0.1 percentage point to 4.5%.

China’s gross domestic product increased at 8.9% in the third quarter on the surging industrial and auto production of 13.9%.

The strong and sustained domestic demand expanded the economy in the first nine months at 7.7%. Consumption increased at 4% and investments added 7.3% to the economic expansion but the fall in international traded dragged the economy by 3.6%.

Earnings Review

AT&T Inc, the telecommunications provider reported third quarter revenues fell 1.5% to $30.86 billion from $31.34 billion a year ago. Net income in the quarter fell 1.2% to $3.19 billion or 54 cents per diluted share compared to net income of $3.23 billion or 55 cents per share a year ago.

eBay Inc, the provider of online marketplaces said third quarter revenues rose 5.7% to $2.24 billion from $2.12 billion a year ago. Net income in the quarter fell 29% to $349.7 million or 27 cents per diluted share compared to net income of $492.2 million or 38 cents per share a year ago.

Logitech International S.A., the maker of peripherals for personal computers said second quarter sales fell 25% to $498.1 million from $664.7 million a year ago. Net income in the quarter fell 71.4% to $20.7 million or 11 cents per diluted share compared to net income of $72.3 million or 39 cents per share a year ago.

Delta Air Lines, Inc, an airline operator reported third quarter revenues rose 32.3% to $7.57 billion from $5.72 billion a year ago. Net loss in the quarter was $161 million or 19 cents per diluted share compared to net loss of $50 million or 13 cents per share a year ago.


Asian Markets Review

The Nikkei 225 Index in Tokyo closed lower 66.22 or 0.64% to 10,267.17, Hang Seng index in Hong Kong decreased 107.59 or 0.48% to 22,210.52, and CSI 300 index in China lower 21.96 or 0.65% to 3,347.32. ASX 200 index in Australia decreased 25.80 or 0.53% to 4,812.80. The FTSE Bursa KL Composite index in Malaysia was lower 0.04 or 0.00% to 1,260.02.

The Kospi Index in South Korea decreased 23.53 or 1.42% to close at 1,630.33 SET index in Thailand closed lower 7.59 or 1.06% to 708.76. JSE Index in Indonesia decreased 43.61 or 1.76% to 2,433.18. The Sensex index in India decreased 219.43 or 1.29% to 16,789.74.

Europe Markets Review

In London FTSE 100 Index traded lower 55.56 or 1.06% to 5,202.29, in Paris CAC 40 Index decreased 57.67 or 1.49% to 3,815.55 and in Frankfurt DAX index traded lower 82.63 or 1.42% to 5,750.86. In Zurich trading SMI decreased 21.65 or 0.34% to 6,413.01.