Stocks Down as Mid-East Turmoil, Mixed Earnings Off-Set Upbeat Jobless Report

By Staff,

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Stocks are down as mixed corporate earnings and continuing Middle East turmoil off-set new economic data showing a drop in weekly and four-week average jobless claims. Durable goods orders rose in line with expectations.

The Commerce Department reported that orders for U.S.-made durable goods rose 2.7% in January on stronger demand for civilian aircraft. The consensus was for a 2.5% gain, MarketWatch estimated, citing a poll of economists.

Meanwhile, new applications for U.S. unemployment benefits declined last week by 22,000 to 391,000, the Labor Department reported Thursday. Economists polled by MarketWatch had expected initial claims in the week ended Feb. 19 to drop to a seasonally adjusted 405,000 from a revised 413,000 the week before. In addition, the four-week moving average, considered less volatile than weekly claims, fell to more than a two-year low, down 16,500 at 402,000.

Also, investors continued to watch developments in Libya and their subsequent effect on oil prices, which briefly topped $100 a barrel before falling back to $99.35 a barrel, up $1.25 on the April contract.

In company news:

Shares of Salix Pharmaceuticals ( SLXP ) are down after it said it expects the U.S. Food and Drug Administration to decline approval of its drug Xifaxan. The drug is meant to treat non-constipation irritable bowel syndrome. The FDA reportedly does not think the medicine is ready for approval and sought additional information.

E*Trade Financial ( ETFC ) is down after announcing that Citadel Equity Fund Ltd., an affiliate of Citadel LLC, is offering 23,950,000 shares of E*Trade's common stock in an underwritten offering. The hedge fund has also granted the underwriter a 30-day option to purchase up to an additional 3,592,500 shares of common stock. Closing of the offering is expected to occur on or about March 1, 2011, subject to customary closing conditions.

Shares of Kodiak Oil & Gas ( KOG ) are higher after the company announced late Wednesday record year-end 2010 proved reserves and reported record production and sales volumes for the quarter and year ended December 31, 2010.

Shares of Walt Disney Co. ( DIS ) are down after Bloomberg reported the media company is among other movie studios that lost a piracy lawsuit in Australia. The Federal Court of Australia Full Court upheld a lower-court judge's verdict that iiNet and local Internet companies aren't responsible for customers illegally downloading films.

Tri-Valley ( TIV ) says it won a favorable settlement of lease termination litigation brought in 2009 by the lessors of its Lenox Ranch oil and gas leases located in its Pleasant Valley oil sands project near Oxnard, Calif.

Chevron (CVX) shares are higher after Reuters reported the company has started to drill an exploratory well at a site in Bangladesh to determine if there are gas reserves there. Chevron is planning to drill the exploratory well up to a 4,500-meter depth. Development will start next year.

Corporate earnings continued:

--GM (GM) reports Q4 revenue of $36.9 billion and earnings of $0.31 per share. The Street view was $32.9 billion in revenue and earnings of $0.46 per share. It's unclear if the earnings numbers are comparable.

--Dish Network Corp. (DISH) reports Q4 profit of $0.56 from $0.40 a year earlier, topping the Street view for $0.53. Total revenue for the quarter rose 8.2% to $3.21 billion, in line with the Street view. The company said it lost around 156,000 net subscribers during the fourth quarter, giving the group around 14.13 million subscribers at year-end.

--Heinz (HNZ) expects full year EPS in the range of $3.04 to $3.10 per share, up from previous guidance of $2.95 to $3.05 per share. The Street is at $3.09 per share. For Q4, the company expects EPS of around $0.84 per share, vs. the Street view of $0.79 per share.

--Target (TGT) reports Q4 EPS of $1.45, which includes a 7-cent-per-share tax gain. The Street view was $1.40 per share, excluding items. Sales were $20.3 billion, just shy of expectations of $20.7 billion.

--ADRs of Royal Bank of Scotland (RBS) are down after the bank swung to a Q4 profit of 12 million pounds ($19 million) from a loss of 765 million pounds a year earlier. The net loss for the year shrank to 1.13 billion pounds from 3.61 billion pounds, but was still worse than the 700 million pound loss analysts had been expecting, MarketWatch reported.

--IMAX (IMAX) reports Q4 revenue of $69.2 mln, better than the analyst consensus of $61 mln on Thomson Reuters. Reported EPS was $0.21, in line with expectations.

--Sears Holdings Corp. (SHLD) reports Q4 adjusted EPS $3.67 a share compared to $3.69 a year earlier, while the Street view is for $3.60. Revenue slipped less than 1% to $13.14 billion from $13.25 billion but topped the Street view for $13.02 billion. Late on Wednesday, Sears named Louis D'Ambrosio chief executive, succeeding W. Bruce Johnson, who had been interim CEO for three years. D'Ambrosio had been consulting to Sears for six months; prior to that he had been CEO of Avaya Inc.

Commodities are mixed. April gold contracts are down $1, or 0.10%, to $1,412 an ounce while April crude oil contacts are up $1.25, at $99.35 a barrel.

In energy ETFs, the United States Oil Fund (USO) is up 1.23% to $40.29 and the United States Natural Gas fund (UNG) is down $0.14, or 2.66%, to $5.12.

In precious metal ETFs, the SPDR Gold Trust (GLD) is up 0.15% to $137.70. Market Vectors Gold Miners (GDX) is down 1.80% to $58.55. iShares Silver Trust (SLV) is down 1.22% to $32.31.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Copyright (C) 2014 All rights reserved. Unauthorized reproduction is strictly prohibited.

This article appears in: Investing Commodities
Referenced Stocks: DIS , ETFC , KOG , SLXP , TIV

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