Initial Claims dropped down to 466,000 for the week ending 11/21, better than the expected decrease to 496,700, following a revised level of 501,000 from the previous week. This is the first week since January 3rd where weekly filings fell below 500,000. The 4-week moving average was 496,500, a decrease of 16,500 from the previous week’s revised average of 513,000. Seasonally adjusted insured unemployment from the prior week, ending on 11/14, was 5,423,000, a decrease of 190,000 from the preceding week's revised level. Seasonally adjusted insured unemployment rate from the week ending on 11/14, was 4.1%, down by 0.2% from the prior week.
Personal Income for the month of October increased significantly, by $30.1 billion during the month, or by 0.2%, as was expected, and currently stands at the $12,142.9 billion seasonally adjusted level, following a 0.2% increase in September. Net of taxes, Disposable Personal Income increased by $45.7 billion, or 0.4 percent, in October, compared with an increase of $21.3 billion, or 0.2 percent in September. With the increase in incomes, Personal Consumption Expenditures increased by 0.7%, up $47.2 billion, to a seasonally adjusted annual flow of $10,166.7, better than the expected increase of 0.6%, after a decrease to the same effect in September, revised upward from an originally reported 0.5% decrease. With the increase in spending higher than the increase in income, the Personal Savings Rate decreased to 4.4% in October, from its September level of 4.6%.
Durable Orders decreased by 0.6%, $1.0 billion, during October to $166.2 billion, contrary to the expected increase of 0.6% gain, following a 2.0% increase in September and a 2.6% decrease in August. Machinery had the largest decrease, by 8.0%, $1.9 billion, to $21.8 billion, after two consecutive monthly increases. Over the past 12 months, Durable Orders have dropped by 23.0%.
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U.S. stocks closed lower Tuesday, paring deeper losses, as economic concerns kept investors on tenterhooks. However, the markets managed to contain losses as a brighter forecast from the Federal Reserve assured investors about the sustainability of the recovery. Also, a weaker dollar helped shares of commodity-related and industrial companies.
The markets only gathered steam in the afternoon after the Fed released minutes from its latest meeting. While pledging to keep interest rates at record low levels, the Fed policymakers, however, noted record low interest rates could lead to excessive risk-taking in financials markets. Nevertheless, the Fed raised its outlook for economic growth during the second half of this year, but said unemployment levels will remain high. The Fed lowered its unemployment estimates to 9.3%-9.7% in 2010 from 9.5%-9.8%, noting the economy continues to improve.
On Tuesday, the Dow Jones industrial average fell 17.24 points, or 0.2%, to 10,433.71. The Standard & Poor’s 500-stock index fell 0.59 points, or 0.1%, to 1,105.65, and the Nasdaq composite index fell 6.83 points, or 0.3%, to 2,169.18. The CBOE Vix index dropped to its lowest in fourteen months, off 3.3% to 20.47. On the NYSE volume dropped to 0.952 billion shares, with declining issues ahead of advancing shares by an eight to seven margin.
Tuesday saw volatile and a low volume trading, a trend that is likely to continue through the holiday-shortened week. All financial markets are closed Thursday for Thanksgiving.
On Tuesday, healthcare companies helped offset drops in financial and industrial shares. Medtronic Inc. (NYSE:MDT) jumped more than 7% after the medical device maker reported a surprise 59% increase in its quarterly profit and raised its full-year outlook. Shares in the company rose $2.94, or 7.3%, to $43.25.
Among financial companies, JPMorgan Chase (NYSE:JPM) led the declining issues in the Dow average, falling 1.9% to $42.48. Bank of America (NYSE:BAC) fell 1.2% to $16.10, while Morgan Stanley (NYSE:MS) dropped 1.5% to $32.12. Fifth Third Bancorp (NYSE:FITB) fell 1.6% to $10.01.
Safe-haven assets such as Treasuries and gold prices rose. Treasuries performed well after the $42 billion auction in 5-year notes received a strong response. Gold prices hit a fresh record close for the eighth consecutive day, closing up $1.90 at $1165.50 per ounce.
• J Crew Group (NYSE:JCG) wowed investors with sharply better-than-expected third quarter earnings of 67 cents a share, versus 30 cents a year ago, and ahead of Zacks estimates of 58 cents a share. Revenues of $414.1 million exceeded last year's $363.1 million and beat projections of $406.6 million. The firm expects fourth quarter earnings of 37 cents to 42 cents a share
• Goldman Sachs (NYSE:GS) increased its six-month price target for Amazon.com (NASDAQ:AMZN) from $125 to $146, maintaining its "buy" rating. Goldman said it believed online discount wars have added to its traffic flow, generating revenue gains. Fourth quarter estimates were raised from $8.9 to $9.1 billion
• Piper Jaffray (NYSE:PJC) reiterated its "overweight" rating on Dollar Tree (NASDAQ:DLTR), lifting its price target to $60 from $57, its fourth quarter estimates to $1.38 from $1.30, and its 2010 projection to $3.82 from $3.71
• Tiffany (NYSE:TIF) reported better-than-expected earnings of 33 cents a share, 9 cents above Zacks projections, on revenues of $598 million versus Zacks estimates of $575 million. For 2010 the firm projected $1.88 to $1.98 a share versus estimates of $1.77
• Deere (NYSE:DE) reported fiscal fourth quarter earnings of 23 cents a share, 20 cents above Zacks projections, on revenues of $4.73 billion, which bested estimates of $4.44 billion. However, for 2010, the firm expects a sales decline of 1%
• TiVo (NASDAQ:TIVO) reported an inline third quarter loss of 6 cents on revenues of $56.9 million, ahead of the $48 million expected
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