U.S. Service Industry Expands; Dollar Weak

123jump.com Staff
03 Mar, 2010
New York City

U.S. indexes traded higher and commodities prices advanced on improved economic outlook. The dollar edged lower after Greece announced additional budget cuts. Service industry index showed expansion in February. Big Lots, Novell Inc increased but Costco Wholesale Corp declined.

[R]10:45 AM New York – U.S. indexes traded higher and commodities prices advanced on improved economic outlook. The dollar edged lower after Greece announced additional budget cuts. Service industry index showed expansion in February. Big Lots, Novell Inc increased but Costco Wholesale Corp declined.[/R]

U.S. stocks and commodities traded higher after sentiment improved and service industry expanded. Greece announced additional cuts to meet demands from the EU regulators.

Greece announced additional budget cuts of 4.8 billion euros to meet the demand of EU regulators ahead of Greek Prime Minister meeting with Germany Chancellor Angela Merkel on March 5 and French President Nicholas Sarkozy on March 7.

Service industry expanded in February according to the latest read released by the Institute for Supply Management.

The index for non-manufacturing increased in the month to 53 from 50.5 in January. Any read above 50 shows an expansion. The index of new orders in the industry increased to 55 from 54.7 in January and a measure of backlogs increased to 46 from 45.5.

Futures of crude oil increased 59 cents to $80.27 and natural gas added 3 cents to $4.74. Gold futures edged up 50 cents to $1,137.90.

Yields on 10-year bonds traded 3.64% and 30-year bonds at 4.60%.

Crude oil inventories at the end of last week increased 4.1 million barrels to 341.6 million barrels. Motor Gasoline inventories increased 0.7 million barrels and that of finished gasoline decreased and distillate decreased by 0.9 million barrels.

Stocks Movers

Big Lots Inc increased 4% after the closeout retailer reported fourth quarter income increase of 34% and forecasted 2010 earnings from continuing operations between $2.65 and $2.75 a share.

Costco Wholesale Corp declined 1% after second quarter earnings increased 4.5%.

Joy Global Inc added 5% after first quarter adjusted profits increased to 73 cents a share.

Novell Inc soared 25% after it received an unsolicited offer from its shareholder Elliott Associates LP for $5.75 a share or $2 billion.

Earnings Review

Big Lots, Inc ((BIG)), the closeout retailer reported fourth quarter sales rose 6.5% to $1.46 billion from $1.37 billion a year ago. Net income in the quarter rose 34% to $105.4 million or $1.27 per diluted share compared to net income of $78.8 million or 96 cents per share a year ago.

Comparable same-stores sales increased 5.1%.

BJ’s Wholesale Club ((BJ)), the warehouse club operator reported fourth quarter sales rose 9.6% to $2.74 billion from $2.50 billion a year ago. Net income in the quarter rose 4.5% to $55.1 million or $1.01 per diluted share compared to net income of $52.7 million or 91 cents per share a year ago.

Comparable same-stores sales increased 4.6%.

Brown Shoe Company, Inc ((BWS)), a footwear company reported fourth quarter sales rose 8.6% to $566.0 million from $521.0 million a year ago. Net income in the quarter was $5.0 million or 12 cents per diluted share compared to net loss of $153.0 million or $3.68 per share a year ago.