What’s the Story Morning Glory?

by CC January 5, 2012 9:15 am • Commentary


The number of Americans who filed requests for unemployment benefits fell for the fourth time in five weeks, keeping claims at a level usually associated with modest job growth.

New requests for unemployment benefits fell by 15,000 last week to a seasonally adjusted 372,000, the U.S. Labor Department said Thursday. Claims from two weeks ago were revised up to 387,000 from 381,000, based on more complete state data.

Economists surveyed by MarketWatch had projected claims would fall to 373,000 in the week ended Dec. 31.


ADP said its payroll report for December showed 325,000 new private-sector jobs being created, way way way ahead of the 175,000 economists expected. This was the biggest monthly gain since December 2010, coming on top of a 204,000-job gain in November.

There must be some seasonal issues here. When asked about that possibility on CNBC just now, Joel Prakken of Macroeconomic Advisers, which puts the number together with ADP, said, “Fair enough.”

But he also said this comes in the context of improving jobless claims and other signs of a better labor market.

He also hesitated, though, to call this a “breakout number” signaling a big change in the weather. Because of seasonality issues, he said, “we have to be a little more cautious about this number.”


U.S. retailers offered mixed results for holiday sales in December, with Costco Wholesale Corp. COST -0.56%reporting U.S. sale-store sales excluding fuel climbed 6% during the month from the year-ago period. Target Corp. TGT -3.60%  , however, lowered its earnings expectations and reported revenue at stores open at least a year below analysts’ estimates.

The Institute for Supply Management’s index measuring activity outside the manufacturing sector in December is set for release at 10 a.m. Eastern. Economists expect the index to rise to 53.3% from 52% in November.


Stocks to watch today include Target, Sirius XM and more.

Target is putting itself in the camp of holiday underperformers, with December same-store-sales rising just half of analysts’ estimates and prompting a fiscal fourth-quarter earnings forecast cut. Target specifically cited entertainment-related products–electronics, movies, music–for its shortfall. The miss follows a shortfall in November. Shares fell 4.5% to $47.75 premarket.

Eli Lilly & Co. shares also slipped, dropping 3.5% to $39.30, as its revised outlook for 2012 disappointed investors.

Sirius said it added about 1.7 million net new subscribers in 2011, exceeding the company’s expectations. Shares rose 3.8% to $1.90 premarket as the satellite-radio operator said it ended the year with nearly 21.9 million subscribers. The company had expected 1.6 million subscriber additions for the year.

Zumiez raised its fourth-quarter guidance as December same-store sales beat analyst expectations. Shares surged 11% to $29.17 in premarket trading.

Spanish banking stocks fell in early trade after the government said the sector will need to raise about EUR50 billion in additional provisions to deal with bad property assets. Banco Santander SA’s American depository shares were down 4.9% to $7.17 in recent premarket trading.

Children’s Place Retail Stores Inc. lowered its fourth-quarter earnings guidance, as the children’s specialty retailer cited aggressive markdowns and high expenses. Shares slumped 11% to $47.45 in premarket trading.

Seagate Technology PLC (STX) lifted its revenue outlook for its fiscal second and third quarters as the impact from Thailand flooding wasn’t as bad as expected and the company benefited from higher pricing. Seagate shares jumped 7.3% to $18.05 in premarket trading.

SodaStream International Ltd. will soon be adding bubbles to Kraft Foods Inc.’s Crystal Light and Country Time Lemonade. Under a licensing agreement, SodaStream will add the two Kraft brands to its portfolio of more than 120 flavors that can be made into carbonated drinks at home using SodaStream machines, sales of which have boomed recently in the U.S. The company’s shares surged 9.3% to $41.25 premarket.

American Greetings Corp. unveiled plans to buy back up to $75 million of its Class A shares in an apparent effort to reassure investors following the company’s December stock plunge. Shares edged up 0.4% to $12.55 premarket following the shareholder-friendly move. The stock was off 28% over the past month through Wednesday’s close.

Oclaro Inc. said revenues in its just-ended fiscal quarter were better than expected and predicted all but one of its product lines hindered by Thai flooding would be restarted by the end of the month. Shares in the optical components company jumped 8.8% to $3.20 in premarket trading.