Jobless Claims Drop

Elena
23 Feb, 2006
New York City

Asian markets sharply rose. The Nikkei led the gainers, surging 2%, closely followed by South Korean Kospi, up 1.5%. European markets hit new multi-year highs at mid-day with the German DAX 30 rising 0.2%. Toll Bros beat estimates, posting Q1 net income rise of 49% to 98 cents a share, with revenue up 35% to $1.34 billion and its backlog up 22% to $5.95 billion. CBS posted a Q4 net loss of $6 a share, narrower than a loss of $10.99 a share a year ago.

U.S. MARKET AVERAGES

U.S. stock futures were sitting near the unchanged mark, predicting a flat start after Wednesday’s rally when stocks recorded notable gains on benign rise in core inflation and oil prices drop. The Dow Industrials was the most conspicuous gainer, reaching four-and-a-half year highs to 11,137, its top level since June 2001.

In earnings news, Toll Brothers posted Q1 net income rise of 49% to $163.9 million, or 98 cents a share, with revenue up 35% to $1.34 billion and its backlog up 22% to $5.95 billion. Company's quarterly results beat analyst expectations for earnings of 92 cents a share. The homebuilder cut its 2006 profit outlook.

Host Marriott reported a 21% increase in Q4 earnings and funds from operations of 44 cents a share.

On the economic news front, weekly jobless claims are scheduled for release. Economists expect initial jobless claims will continue to hover near the 300,000 mark for the week ended Feb 18. The government will reveal its petroleum inventory report.

Demand for 5-year Treasury notes as well as speeches from regional Federal Reserve presidents will also be in focus.

Dow Jones futures were recently down 3 points, S&P 500 futures were off 0.5 of a point, and Nasdaq 100 futures eased 2 point.

ECONOMIC NEWS

Thursday morning, the Department of Labor released its report on initial jobless claims in the week ended February 18, showing that jobless claims fell unexpectedly.

The Labor Dept. said that jobless claims fell to 278,000 from previous week's upwardly revised figure of 298,000. Economists had been expecting jobless claims to edge up to 300,000 compared to the 297,000 originally reported for the previous week.

The four-week moving average also moved back to the downside after ending a six-week streak of decreases in the previous week. The less volatile moving average fell to 281,750 from the previous week's revised average of 283,250.

The report also showed that continuing claims rose to 2.495 million in the week ended February 11 from the preceding week's revised level of 2.454 million.

INTERNATIONAL MARKETS NEWS

Asian-Pacific benchmarks posted solid gains to close Thursday session in the positive. Regional markets were boosted by U.S. markets gains, fresh multi-year highs in Europe and oil prices decline. The Nikkei led gainers, rising 2% on optimism about domestic economy. South Korea’s Kospi surged 1.5%, followed by Hong Kong’s Hang Seng which climbed 1.1% and Taiwan’s weighted index, up 0.9%. Shanghai composite recovered from early losses to rise 0.4%.

European stocks hit new multi-year highs at mid-day, lifted by gains in the utility sector amid takeover speculations. However, Reuters Group and BAE Systems weighed on market sentiment after releasing annual results. The German DAX 30 rose 0.2%, the French CAC 40 gained 0.1%, while London’s FTSE was slightly up at 5,873.

OIL, METALS, CURRENCIES

Crude oil prices retreated on expectations of higher oil inventories data. Light sweet crude April delivery declined 24 cents to $60.77 a barrel. Gasoline marginally rose to $1.4789, while heating oil was steady at $1.6513. Natural gas traded even at $7.292 per 1,000 cubic feet. London Brent for April delivery dropped 7 cents to $60.37 a barrel.

European gold rose, rebounding from recent declines. In London gold traded at the fixed price of $552.50 bid per troy ounce, up from $551.60. In Zurich the precious metal traded at $552.60, up from $552. In Hong Kong gold dropped $1.70 to close at $552. Silver fell to $9.50 from $9.57.

The U.S. dollar lost ground against other major currencies. The euro traded at $1.1943 up from $1.1900. The dollar bought 117.08, down from 118.51. The British pound stood at $1.7516, up from $1.7425.

EARNINGS NEWS

EMC Insurance Group Inc, ((EMCI)), insurance company, reported Q4 net income of $1.40 a share, swinging from a net loss of 4 cents a share a year ago on revenue growth, as premiums earned soared 18%. Operating profit came to $1.34 a share in Q4. The company beat analyst estimate for earnings of $1.28 a share.

Marvel Entertainment Inc, ((MVL)), entertainment company, reported Q4 net income of 26 cents a share, a penny down from 27 cents in the same period the previous year, missing analyst views of 31 cents a share. A pretax cash charge of $12.5 million against results for the 2005 quarter was recorded for early termination of its licensing agreement with Toy Biz Worldwide Ltd. Q4 sales amounted to $117.1 from $100.5 million.

Hearst-Argyle Television, ((HTV)), network-affiliated television stations and radio stations operator, reported a 75% decline in Q4 net income to 11 cents a share, due to a lack of political advertising and a $29.2 million charge on assets from hurricane damage to the New Orleans station. If not for the charge, it would have earned 30 cents a share, topping analysts’ estimate of 26 cents a share.

NII Holdings, ((NIHD)), a provider of mobile communications services, reported that Q4 net income shed 3% to 33 cents a share, from a year ago. Operating revenue advanced 41% as the company added 202,500 net subscribers in Q4.

Pinnacle Airlines Corp, ((PNCL)), carrier, reported that Q4 net income dropped 3% to 45 cents a share, from the year-ago period. If not for one-time items, the company would have gained 60 cents a share. Revenue declined 17%.

Hornbeck Offshore Services Inc, ((HOS)), OSVs serving the offshore oil and gas provider, reported Q4 net income of 55 cents a share, swinging from a loss of 48 cents a share a year ago on revenue growth, topping analysts’ forecasts of 46 cents a share. Operating income improved to $24.9 million from $10.2 million.

Host Marriott Corp, ((HMT)), hotel chain owner, announced that Q4 net income advanced 21% to 19 cents a share, from the year-ago quarter on revenue growth. Funds from operations for Q4 soared 26% to 44 cents a share, below analysts’ forecasts for FFO of 51 cents a share. The company expects comparable hotel revenue per available room to increase by 7% to 9% in Q1 and by 7% to 10% for the full year.

Sypris Solutions Inc, (SYPR)), technology-based outsourced services provider, reported a Q4 net loss of a penny a share, up from a loss of 4 cents a share a year-ago on revenue growth, topping analyst estimate of a loss of 3 cents a share. The company’s cash flow from operations advanced to $24.5 million from $21 million.

CBS Corp, ((CBS)), broadcasting company, posted a Q4 net loss of $6 a share, narrower than a loss of $10.99 a share in the year-earlier quarter. The company reported a profit of 41 cents a share on a pro forma basis from continuing operations. Revenue grew to $3.83 billion from $3.75 billion a year ago, lifted by growth in television, outdoor and parks/publishing. On a pro forma basis, the company topped analysts’ expectations of a profit of 39 cents a share.

Noble Energy Inc, ((NBL)), energy company, reported Q4 earnings of $1.27 a share, up vs. a profit of 73 cents a share a year-ago on higher revenue. The company said that the rise in earnings was due to higher daily production and realized prices, beating analyst estimate of $1.23 a share.