Weak U.S. Housing Starts; Stocks Struggle

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

U.S. stocks traded sideways ahead of the Fed

[R]10:25 AM New York – U.S. stocks traded sideways ahead of the Fed’s rate decision this afternoon. Housing starts declined 5.9% in February to annual rate of 575,000 units. Bad weather affected hosing completion to plunge 15.5% from a year ago. Financial Engines, Inc priced its initial public offering to raise $127 million.[/R]

Housing permits in February decreased 1.6% from January or 11.3% a year ago month to 612,000, according to the latest data released by the Commerce Department.

Housing starts in February fell 5.9% from January to 575,000 annualized rate from the revised 611,000 in January. Rising foreclosures, unsold inventories of homes and elevated unemployment is discouraging new home construction. Weather played a larger role in affecting the home construction in the month.

Single family home construction declined 0.6% in the month to 499,000 annual rate in the month.

Housing completion rose 5.4% from January or plunged 15.5% from a year ago month to 664,000.

President Barack Obama in November extended the tax relief of $8,000 to first time home buyers to June for those contracts that were signed no later than the end of April.

February import price index decreased 0.3% after 1.9% decline in fuel prices. The index for export prices decreased 0.5% after rising 0.7% in each of last two months.

Commodities, Currencies and Bonds

Crude oil futures increased $1.07 to $80.87 a barrel and natural gas futures decreased 2 cents to $4.37 per mBtu.

Gold futures jumped $18.20 to $1,123 an ounce and copper futures increased 5.05 cents to 336.55 cents a pound.

Yields on 10-year U.S. Treasuries increased to 3.69% and on 30-year bonds decreased to 4.62%.

The dollar decreased against the euro to $1.3772 and edged lower against the yen to 90.45 yen.

Stock Movers

Arthrocare Corp surged 5% after the surgical tools maker reported fourth quarter adjusted earnings of 21 cents a share.

eBay Inc gained more than 1% after the online auction site and the owner of Skype and PayPal said that its mobile application Send Money on iPhone process surged more than fivefold to $141 million in 2009.

Financial Engines, Inc priced 10.6 million shares at $12 a share to raise $127 million. The retirement asset manager has $26 billion under management and generated $84.98 million in 2009. The company offering was priced at

Genpact Ltd declined 1.5% after it guided current quarter revenue between $285 million and $290 million and said that 28 million shares will be sold by shareholders.

Earnings Review

Alibaba.com Limited, an e-commerce company reported 2009 revenues rose 29% to 3.87 billion yuan from 3.00 billion yuan a year ago. Net profit in the year fell 12% to 1.01 billion yuan or 19.94 yuan a diluted share compared to net profit of 1.15 billion yuan or 22.83 yuan a share a year ago.

Bulgari SpA, the luxury jeweler said 2009 revenues fell 14% to €926.6 million from €1.08 billion a year ago. Net loss for the year was €47.1 million or €0.16 per diluted share compared to net profit of €82.9 million or €0.27 per share a year ago.

Emeritus Corporation ((ESC)), a provider of assisted living services said fourth quarter revenues rose 12.3% to $229.6 million from $204.5 million a year ago. Net loss in the quarter was $15.9 million or 41 cents per diluted share compared to net loss of $30.5 million or 78 cents per share a year ago.

Seaspan Corporation ((SSW)), a shipping company said fourth quarter revenues rose 25.3% to $78.6 million from $62.7 million a year ago. Net income in the quarter was $74.7 million or 78 cents per diluted share compared to net loss of $241.9 million or $3.63 per share a year ago.