Markets Wary on Jobs and Retail

07 Apr, 2005
New York City

Investors are cautious despite a decrease in weekly jobless claims. Attention is focused on retailers and company earnings news.

Investors are cautious despite a decrease in weekly jobless claims. Attention is focused on retailers and company earnings news.

The U.S. Labor Department said first-time claims for state unemployment benefits fell by 19,000 to 334,000 in the week ending April 2. The four-week average of new claims was nearly unchanged at 336,500.

The number of people receiving unemployment checks rose by 90,000 to 2.69 million in the week ending March 26.

Shares of Cisco Systems Inc. (CSCO) moved up 0.6% to $17.87 after analysts with JMP Securities upgraded the stock to outperform from market perform. The chipmaker is expected to perform in line with the broader market.

Shares of General Motors Corp. (GM) fell 1.4% to $29.45 after analysts with Citigroup Smith Barney cut the stock to sell from hold, blaming the automaker’s restructuring which may result to $4 billion in cash.

Computer Associates International Inc. (CA) said it would pay $17 a share to buy Concord Communications in a deal valued at $350 million.

Retail companies continue to release earnings results this morning.

J.C. Penney Co. (JCP) reported a 0.1 percent rise in total March sales, while Gap Inc. (GPS) said net sales slipped 1% last month.

Discount shoes retailer Payless ShoeSource Inc. (PSS) said total March sales fell 1.4% to $270.2 million, although same-store sales increased 1.4%. The stock is trading around $16.

Costco Wholesale Corp. (COST) reported 10% rise in March net sales to $4.87 billion and a 13% increase of international sales. Shares moved up 1.1% to $46.8 this morning.

Wal-Mart Stores Inc. (WMT) warned that first-quarter earnings may come at the low end of earlier forecast of 56 to 58 cents a share, following flat same-store sales in April. Shares are down 1% to $49.

The world’s biggest retailer reported an 11% jump in total March sales and said same-store sales jumped 4.3%.

Goody's Family Clothing Inc. (GDYS) said same-store sales fell 9.2% in March as a result of cold weather and higher gas prices. The retailer expects first quarter earnings will drop below last year level of 24 cents a share. The stock is trading around $8.8.

Bebe Stores Inc. (BEBE) said total March sales jumped 42% to $49.7 million in line with a 40% increase of same-store sales. The women's apparel retailer's stock moved up 2.9% to $35 after gaining 40 cents yesterday.

Shares of Time Warner Inc. (TWX) fell 1.1% to $17.4 this morning after the company announced plans to launch a new phone service via America Online in more than 40 U.S. markets. The new service will integrate enhanced voice and online messaging features.

Warner Music Group, the recorded music producer and seller controlled by Edgar Bronfman Jr., said that it plans to go public on the NYSE and attempt to raise as much as $750 million. Goldman Sachs and Morgan Stanley will manage the IPO.

D.R. Horton Inc. (DHI), the largest U.S. homebuilder, reported a 23% rise in second-quarter sales to $4.1 billion. Unit sales rose 6.8% to 14,401 homes from 13,480.

D.R. Horton stock last traded at $29.4.