Stocks Follow Weak Housing Data; CPI Up

Mukesh Buch
18 Nov, 2009
New York City

U.S. stocks struggled in the early morning after the release of consumer price index and housing market reports. Crude oil gained and gold reached another record for the year as dollar weakened.

[R]10:00 AM New York – U.S. stocks struggled in the early morning after the release of consumer price index and housing market reports. Crude oil gained and gold reached another record for the year as dollar weakened.[/R]

U.S. stocks edged lower after weaker than expected housing market data. The new home construction permits, starts and completions declined. The consumer price index increased in October and prices excluding food and energy increased at a slower pace.

Crude oil gained 60 cents to $79.74 a barrel and gold reached a new intra-day high of $1,150 an ounce.

Housing permits in October fell 4% to 552,000 units, starts declined 10.6% to 529,000 and completions dropped 1.9% to 740,000. Single family housing starts in October declined 6.8% to 476,000.

The index of consumer prices increased 0.3% in October. The unadjusted index decreased 0.2% in the last one year to the month. The energy index increased fifth times in the last six months.

Home builders in the early trading inched higher, despite weaker than expected housing data. Lennar Corp, Pulte Homes and DR Horton inched up more than 0.5%.

Euro-zone Adjusted Production Declines

Seasonally adjusted production decreased by 1.1% both in euro area (EA16) and EU27 in August 2009, compared with the previous month. In August, production fell by 0.1% and 0.1% respectively.

Earnings Review

BJ’s Wholesale Club, the wholesale club operator reported third quarter sales rose 2% to $2.45 billion from $2.40 billion a year ago. Net income in the quarter fell 37% to $17.7 million or 32 cents per diluted share compared to net income of $28.2 million or 48 cents per share a year ago. Comparable same-store sales fell 2.5%.

Chico’s FAS, Inc, the women''s clothing and accessories retailer reported third quarter sales rose 13.3% to $446.9 million from $394.2 million a year ago. Net income in the quarter was $22.7 million or 13 cents per diluted share compared to net income of $2.0 million or 1 cent per share a year ago. Comparable same-store sales increased 12.8%.

AB Volvo, the truck manufacturer said third quarter sales fell 30.5% to SEK48.5 billion from SEK69.8 billion a year ago. Net loss in the quarter was SEK2.9 billion or SEK1.44 per diluted share compared to net profit of SEK2.0 billion or SEK0.98 per share a year ago.

Bilfinger Berger AG, the construction and services group said third quarter revenues fell 11% to €2.4 billion from €2.7 billion a year ago. Net profit in the quarter fell 87% to €7 million or €0.21 per diluted share compared to net profit of €54 million or €1.53 per share a year ago.

Autodesk, Inc, the design and engineering software maker said third quarter revenues fell 31.3% to $416.9 million from $607.1 million a year ago. Net income in the quarter fell 72% to $29.5 million or 13 cents per diluted share compared to net income of $104.5 million or 45 cents per share a year ago.

E-House (China) Holdings Limited, the real estate services company said third quarter revenues rose 119% to $86.2 million from $39.3 million a year ago. Net income in the quarter rose 220% to $34.9 million or 43 cents per diluted share compared to net income of $10.9 million or 13 cents per share a year ago.

Salesforce.com, Inc, the provider of software on demand said third quarter revenues rose 19.5% to $330.5 million from $276.5 million a year ago. Net income in the quarter rose 105% to $20.7 million or 16 cents per diluted share compared to net income of $10.1 million or 8 cents per share a year ago.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed lower 53.13 or 0.55% to 9,676.80, and Hang Seng index in Hong Kong decreased 73.82 or 0.32% to 22,840.33, and CSI 300 index in China higher 1.88 or 0.05% to 3,630.23. ASX 200 index in Australia increased 9.60 or 0.20% to 4,739.00. The FTSE Bursa KL Composite index in Malaysia was lower 4.85 or 0.38% to 1,275.10.

The Kospi Index in South Korea increased 17.99 or 1.13% to close at 1,603.97. SET index in Thailand closed higher 0.71 or 0.10% to 707.26. JSE Index in Indonesia increased 10.44 or 0.42% to 2,484.23. The Sensex index in India decreased 51.87 or 0.30% to 16,998.78.

Europe Markets Review

In London FTSE 100 Index traded higher 16.39 or 0.31% to 5,362.32, in Paris CAC 40 Index increased 20.38 or 0.53% to 3,849.44 and in Frankfurt DAX index traded higher 29.01 or 0.50% to 5,807.44. In Zurich trading SMI increased 43.78 or 0.69% to 6,420.18.