POLITICS

Stocks Rebound on Upbeat U.S. Data

Staff Writer
Donaldsonville Chief

NEW YORK (TheStreet) -- The major U.S. equity averages were rebounding Thursday after some upbeat domestic labor and trade data and a bit more clarity out of Europe following the European Central Bank's latest policy decision and the Greek parliamentary vote on austerity measures.

The uptick follows steep declines of the major U.S. equity averages during Wednesday's session, when stocks were slammed by fiscal cliff fears.

The Dow Jones Industrial Average was rising more than 34 points, or 0.27%, at 12,967. The blue-chip index began the session up slightly more than 6% in 2012.

The S&P 500 was rising close to 6 points, or 0.42%, at 1400. The Nasdaq was up more than 11 points, or 0.37%, at 2948.

The Dow closed below 13,000 for the first time since Aug. 2 Wednesday as worries about the fiscal cliff rattled investors in the wake of President Barack Obama's re-election on Tuesday.

The Census Bureau said Thursday that the U.S. trade deficit narrowed to $41.5 billion in September, down from the previous deficit figure of $43.8 billion that was revised from $44.2 billion. A trade deficit of $45 billion was expected for September.

"There were good economic numbers today," said Peter Cardillo, chief market economist at Rockwell Global Capital. "The trade deficit shrank as opposed to showing an increase. Narrowing bodes well for economic activity this quarter."

"Psychologically the market is going to take some time to repair yesterday's damage ... the next four or five days before we begin to consolidate," he added. "The market is focused very much on the fiscal cliff right now. I'm looking at some kind of agreement on the extension of tax cuts -- more or less another patch job. Eventually it will be worked out. In the meantime, the market is going to be subject to that fear factor of the fiscal cliff, and of course Europe."

The Labor Department reported that initial jobless claims for the week ended Nov. 3 fell by 8,000 to a less-than-expected 355,000 from the previous week's unrevised figure of 363,000. On average, economists were expecting the figure to rise to 370,000.

"This is hard to read ... claims we dismiss as Sandy impacted and so are likely to rise in weeks to come," noted David Ader, a strategist at CRT.

The four-week moving average was 370,500, an increase of 3,250 from the previous week's unrevised average of 367,250.

Continuing claims in the week ended Oct. 27 fell by 135,000 to 3.127 million, from a downwardly revised 3.262 million. Economists were expecting continuing claims of 3.253 million.

Overseas, the European Central Bank stood pat on its benchmark interest rate of 0.75% Thursday amid deepening concerns about the eurozone economy and as Spain continued to refrain from requesting a bailout that would trigger ECB bond-buying.

As expected, the Bank of England held off on additional quantitative easing for now amid some recent upbeat economic data, though more stimulus looked to be a possibility in the near future amid doubts of a sustained economic recovery.

The U.K. Monetary Policy Committee decided to keep the key interest rate at a record low of 0.5% and the size of the bond-buying program at 375 billion pounds.

Also, the Greek parliament early Thursday passed a new, tough austerity package that had triggered mass protests on the streets of Athens.

"Greece's parliament has voted through structural reform measures. Now there are just nine voted to go before the cash is forthcoming -- the Greek budget (Sunday), Ecofin (Monday) and seven parliamentary votes across the Euro areas (next couple of weeks)," commented Paul Donovan, a global economist at UBS.

Spain, meanwhile, was able to sell €4.76 billion of debt Thursday, just exceeding the higher end of the predicted range and rounding its funding requirements for the year.

Investors were also keeping an eye on China's big leadership change, which economists at Capital Economics noted could be a more significant event for emerging economies than the re-election of Obama.

"The installation of a cohesive Chinese leadership committed to putting the economy on a more sustainable footing would create opportunities for consumer goods producers while also signaling an end to the global commodity boom," said Mark Williams, an economist at Capital Economics.

Overseas markets traded mixed. The FTSE 100 in London was rising 0.36%, while the DAX in Germany was tacking on 0.37%. Japan's Nikkei average settled down 1.51% on Thursday and Hong Kong's Hang Seng closed behind by 2.41%.

Gold for December delivery was adding $5.20 to $1,719.20 an ounce at the Comex division of the New York Mercantile Exchange, while December crude oil contracts were rising 65 cents at $85.09 a barrel.

The benchmark 10-year Treasury was down 10/32, raising the yield to 1.68%. The dollar was up 0.07%, according to the U.S. dollar index.

In corporate news, shares of JPMorgan Chase(:JPM) were rising more than 1% after the firm said that it was given Federal Reserve approval to restart stock repurchases in the first quarter of 2013 through a capital plan that would also permit ongoing dividend payouts.

CBS(:CBS) shares were jumping more than 4% after the media company booked better-than-expected first-quarter earnings as a fall in advertising sales was balanced by revenue from areas including content and licensing fees.

Walt Disney(:DIS) is slated to report its fiscal fourth-quarter results after Thursday's closing bell and analysts are calling for earnings of 68 cents a share in the September-ended period on revenue of $10.92 billion.

Shares were rising more than 1%.

Shares of Wendy's(:WEN) were tacking on close to 5% after the fast-food chain announced a wider-than-expected third-quarter net loss, but revealed that sales at restaurants opened at least 15 months increased 2.7%, pointing to a sixth straight quarter of growth.

Lawn and garden care products company Scotts Miracle-Gro(:SMG) reported a slightly wider-than-expected fourth-quarter loss and less-than-expected revenue as its company-wide gross margin rate weakened from a year ago due to higher material costs and unfavorable conversion costs, and the operating loss for its global consumer segment widened from a year earlier.

Shares were down more than 1%.

Dean Foods(:DF) beat third-quarter earnings estimates and hiked its full-year earnings guidance to between $1.27 and $1.32 a share, driven by continued strong momentum across the business, offset by the impact of rising commodity costs, particularly at Fresh Dairy Direct.

Shares were surging by more than 6%.

Department store operator Kohl's(:KSS) announced that it now expects full-year earnings of $4.52 to $4.60 a share for fiscal 2012 versus its previous guidance of $4.50 to $4.65 a share.

The company posted better-than-expected third-quarter results as same-store sales increased 1.1%.

Shares were sliding more than 2.5%.

Groupon(:GRPN), the online deals company, is forecast by analysts Thursday to post a profit of 3 cents a share in the third quarter on revenue of $590.1 million.

Shares were gaining more than 2.5%.

Activision Blizzard(:ATVI) on Wednesday topped Wall Street's profit view on the strength of its latest "World of Warcraft" release, "The Mists of Pandaria" and its "Skylanders" franchise.

Shares were rising more than 1.5%.

Qualcomm(:QCOM), the chipmaker, easily beat Wall Street's consensus profit view on Wednesday and forecast non-GAAP earnings of $1.08 to $1.16 a share on revenue ranging from $5.6 billion to $6.1 billion for its fiscal first quarter.

Shares were popping by more than 7.5%.

Whole Foods Market(:WFM) reported an in-line profit for its fiscal fourth quarter and announced Wednesday it raised its quarterly dividend by 40% to 20 cents a share.

Shares were slumping by nearly 3%.