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While you were sleeping: US jobs, Netflix surprise
Posted By admin On January 25, 2013 @ 7:33 am In Article | Comments Disabled
Article – BusinessDesk
Jan 25 (BusinessDesk) Wall Street moved higher on better-than-expected economic data, while earnings including those of Netflix also surpassed estimates, outweighing the disappointment on Apple’s results.
Jan 25 (BusinessDesk) – Wall Street moved higher on better-than-expected economic data, while earnings including those of Netflix also surpassed estimates, outweighing the disappointment on Apple’s results.
Shares of Netflix soared, last up 37.5 percent, after the company reported a surprise profit.
“Netflix is successfully balancing the costs of international expansion against the increasing profitability of its domestic business,” according to Bloomberg Industries analyst Paul Sweeney.
The latest data on the world’s largest economy provided a picture of better-than-expected strength in jobs, manufacturing and economic activity.
Claims for jobless benefits in the US unexpectedly fell last week. Applications for unemployment insurance payments dropped by 5,000 to 330,000 in the week ended January 19, the fewest in five years, according to Labor Department data.
“The claims numbers are clearly a big surprise and were very good numbers – they imply we may have a good employment number for the month of January,” Hugh Johnson, chief investment officer of Hugh Johnson Advisors in Albany, New York, told Reuters.
Separately, Markit’s preliminary Purchasing Managers Index for US manufacturing rose to 56.1 in January, the highest level since March 2011, while the Conference Board’s Leading Economic Index climbed 0.5 percent to 93.9 in December.
In afternoon trading in New York, the Dow Jones Industrial Average rose 0.42 percent, while the Standard & Poor’s 500 Index gained 0.20 percent. The Nasdaq Composite Index fell 0.47 percent, dragged lower by Apple. Shares in the iPhone maker were last down 10.7 percent to US$459.24, that compares with a record US$705.07 reached in September 2012.
Apple earnings, released after the market close yesterday, proved a huge disappointment.
At least 14 brokerages, including Barclays Capital, Credit Suisse and Deutsche Bank, cut their price target on the stock by US$142 on average, while Morgan Stanley removed the stock from its “best ideas”-list, according to Reuters.
In Europe, the Stoxx 600 Index finished the day with a 0.2 percent increase from the previous close. National benchmark stock indexes in London, Paris and Frankfurt also advanced, climbing 1.1 percent, 0.7 percent and 0.5 percent respectively.
Here, too, economic data surpassed expectations. A composite index based on a survey of purchasing managers in euro-zone services and manufacturing industries rose to 48.2 in January from 47.2 in December, according to Markit. That’s the highest level in 10 months, and the third straight increase.
“The January flash PMI data suggest that the euro-zone economic downturn has eased at the start of 2013,” Chris Williamson, chief economist at Markit, said in a statement.
“Worrying signs of weakness persist, however, with companies cutting staff at a faster rate, reflecting the need to keep costs as low as possible in the face of ongoing uncertainty about the economic outlook,” according to Williamson.
“Trends also remained worryingly divergent within the single currency area, creating tensions for policy makers. While Germany is reporting a strengthening upturn, France is seeing the steepest downturn since early-2009.”
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