US FINANCIAL MARKET
- U.S. stocks opened little changed on Thursday as investors grappled with a host of corporate earnings and muddled economic data.
- AT&T posted net income that was a penny ahead of Wall Street expectations on wireless profit margins that were better than some analysts expected. The results were roughly in line with expectations. AT&T reported a third-quarter profit of $3.81 billion compared with $3.63 billion a year ago. Revenue rose to $32.16 billion from $31.46 billion.
- AT&T reported 363,000 net postpaid subscriber additions in the quarter. Rival Verizon Wireless reported 927,000.
- Altria Group’s third-quarter profit more than doubled as the Marlboro maker paid out less in legal settlements and freed itself from charges related to paying off debt early last year. The owner of the nation’s biggest cigarette maker, Philip Morris USA, posted earnings of $1.39 billion. Revenue increased 6.6 % to $4.8 billion. Marlboro volumes grew 1.5 %.
- 3M reported a 6 % rise in quarterly profit due to higher sales across all its businesses. Net income rose to $1.23 billion from $1.16 billion a year earlier. Revenue rose 5.6 % to $7.92 billion.
- Dow Chemical reported lower-than-expected quarterly results. It said that it expects to raise $3 billion to $4 billion from asset sales. Net income rose 20 % to $594 million. Revenue rose 1 % to $13.73 billion. Analysts on average had expected $13.99 billion.
- Ford Motor boosted its full-year global profit outlook. Net income fell by a little more than one-fifth to $1.27 billion due to nearly $500 million in special charges.
- Xerox forecast earnings for the current quarter below analysts’ estimates.
- U.S. weapons maker Raytheon reported higher-than-expected quarterly earnings and raised its full-year forecast. Third-quarter income from continuing operations fell 2.8 % to $487 million from $501 million a year earlier. Sales dropped 3.4 % to $5.8 billion.
- Unilever, the maker of consumer products from Ben & Jerry’s ice cream to Dove soaps, said that its third quarter revenues suffered from slowing growth in developing countries, where it has more than half of its sales. Revenues fell 6.5 % to 12.5 billion euros ($17.2 billion) due to the strong euro.
- Colgate-Palmolive posted slightly higher third-quarter earnings. Sales rose 1.5 % to $4.4 billion, below the analysts’ average forecast of $4.46 billion.
- Billionaire investor Carl Icahn said he would withhold his shares of Apple from a $150 billion buyback that he has proposed for the iPhone maker. Icahn said he and his affiliates owned 4.7 million Apple shares as of Wednesday morning (about $2.5 billion), a 22 % increase since he met Cook for dinner in late September.
- Korean Air Lines said it would buy 12 aircraft or $3.77 billion worth of aircraft from Boeing.
- Wal-Mart is planning to open 110 stores in China between 2014 and 2016, in addition to the 30 it has already opened this year. Wal-Mart operates more than 400 retail hypermarkets, Sam’s Club stores and distribution centers in more than 160 cities throughout China.
- Japan’s Canon cut its operating profit outlook for the second quarter in a row.
- Aberdeen Asset Management is in talks to buy Scottish Widows Investment Partnership from Lloyds Banking Group, a deal that would make it Europe’s largest publicly traded money manager.
- Oil was steady after data showing a rise in U.S. crude stocks drove prices down heavily on Wednesday. Brent crude futures were up 22 cents at $108.20 a barrel, while U.S. crude gained 31 cents to $97.17.
- The average rate for a 30-year fixed mortgage dropped to 4.13 % the week ended today from 4.28 %. U.S. mortgage rates fell to a four-month low after a weaker-than-expected jobs report drove investors to the safety of the government bonds that guide borrowing costs.
- The euro on Thursday traded near a two-year high (above $1.38) versus the U.S. dollar, shaking off a reminder of the fragility of the euro zone’s economic recovery, as traders focused on a continued fall in U.S. Treasury yields driven by expectations the Federal Reserve won’t rush to begin scaling back the flow of monetary stimulus.
US ECONOMY & POLITICS
- Initial claims for state unemployment benefits fell 12,000 to a seasonally adjusted 350,000. Economists expected first-time applications to fall to 340,000. The four-week moving average for new claims, considered a better measure of labor market trends, rose 10,750 to 348,250. The shutdown pushed up claims in recent weeks as furloughed nonfederal workers applied for benefits.
- Federal workers filed 44,000 new claims for the week ended October 12, a decline from the previous week’s 70,000, which was the highest level since the 1995-1996 government shutdown.
- U.S. manufacturing grew at its slowest pace. The Markit’s Manufacturing Purchasing Managers Index (PMI) fell to 51.1 from 52.8 in September. Markit’s “flash” reading is based on replies from about 85 % of the U.S. manufacturers surveyed.
- Output declined for the first time in more than four years, with the subindex dipping to 49.5 from 55.3.
- New orders were placed at their slowest pace since April, though hiring increased for a fourth straight month with a reading of 52.3 in October.
- The U.S. trade deficit widened slightly in August as exports slipped. The trade gap nudged up 0.4 % to $38.8 billion. Economists had expected the trade deficit to edge up to $39.5 billion in August. Exports dipped 0.1 % to $189.2 billion in August. However, exports of automobiles and parts hit a record high. Imports were little changed at $228 billion.
- The U.S. Federal Reserve unveiled a plan requiring banks to hold enough assets they can easily sell to survive a credit crunch, which it said was tougher than what international regulators demanded. The plan is a key plank of the Basel III capital rules agreed globally to make banks safer after the 2007-09 credit crisis. The new rule would apply in full to banks with $250 billion or more in assets, and not at all to banks with less than $50 billion in assets. The Fed proposed implementing the rules by January 2017, well before the 2019 deadline set by the Basel committee of global bank regulators.
EUROPE & WORLD
- China’s economy is set to grow 7.6 % in 2013, beating the government’s 7.5 % target, a Reuters poll showed. In the first nine months of the year, the $8.5 trillion economy grew 7.7 % from a year earlier, putting it on track to achieve Beijing’s 2013 target of 7.5 %, which would be the weakest growth in 23 years.
- The Markit/HSBC China Manufacturing Purchasing Managers Index (PMI) stood at 50.9 in October. Ten of 11 sub-indices rose. The flash PMI is based on 85-90 % of total responses for each month.
- New orders rose to 51.6, the highest in seven months.
- Markit’s Germany Purchasing Managers Index (PMI), which tracks growth in both the manufacturing and services sector and covers more than two-thirds of the economy, slipped to 52.6 in October from 53.2 the previous month.
- The index tracking the services sector dropped to 52.3 from 53.7 in September, while the index tracking the manufacturing sector was in expansion territory for the fourth consecutive month, rising in line with expectations to 51.5 from 51.1 in September.
- Japan’s government downgraded its assessment of export performance for the second consecutive month in October on slowing shipments to Asia. Domestic demand, boosted by increasing public works and consumer spending, has largely driven Japan’s recovery from recession last year, but signs of weakening exports may mean Japan having to rely even more on domestic demand to continue growing.
TODAY in HISTORY
- The treaties for the Peace of Westphalia were signed, ending the Thirty Years War, ultimately destroying the Holy Roman Empire, and ushering in the modern European state system (1648)
- The George Washington Bridge, connecting New York and New Jersey, opened to traffic (1931)
- The 40-hour work week went into effect under the Fair Labor Standards Act of 1938 (1940)
- The last Concordes landed in London, ending supersonic air travel (2003)
Sources: Reuters, Yahoo Finance, Google Finance, Bloomberg, CNN Money.
This information has been prepared from sources believed to be reliable, but no representation is being made as to its accuracy or completeness. The information provided should be used only as general information and is not intended to provide specific advice or recommendations for any individual. The economic forecasts set forth in the material may not develop as predicted. All indices, such as the S & P 500, are unmanaged and may not be invested into directly.