Markets
For the week of Monday, April 15, 2013, through Friday, April 19, 2013:
- Standard & Poor’s 500 Index: -2.11%
- Dow Jones Industrial Average: -2.11%
- NASDAQ Composite: -2.70%
Stocks started the week tumbling, as steep declines in gold and other commodities fueled a sell-off after worse-than-expected Chinese and American economic growth. The next day, stocks rebounded from the steep slide because of strong earnings, solid housing data and an uptick in gold prices. Investors kept the volatility alive on Wednesday, as weak European economic data and disappointing earnings reports in the United States weighed on the markets. Stocks, the euro and oil prices all pulled back. U.S. stocks opened mostly higher Thursday. Investors considered earnings and jobless claims data that changed little from last week. On Friday, U.S. stocks closed higher. IBM shares dropped on disappointing earnings, which brought the Dow Jones Industrial Average down for much of Friday, but it rebounded in late trading and finished higher along with the S&P 500 and NASDAQ Composite indices.
Economic News
- Chain Store Sales Snapshot:
- The chain store sales index fell 1.1% last week, reversing some of the previous week’s gains.
- Year-over-year growth is now 2%.
- Rain and warmer temperatures mixed to offset demand.
- Gasoline prices continue to fall, providing relief for consumers.
- Consumer Price Index:
- The Consumer Price Index fell slightly more than expected in March, declining 0.2%.
- The reverse from February’s strong reading was attributed to energy prices’ sharp decline.
- Core prices rose 0.1%, in line with its recent performance.
- The Consumer Price Index fell slightly more than expected in March, declining 0.2%.
- Housing Starts:
- Housing starts increased 7% in March, up to 1.036 million units, marking the first time starts
- exceeded the 1 million mark since mid-2008.
- The Census Bureau also revised the February reading upward.
- Starts are up 47% over the March 2012 pace.
- Single-family starts were down 4.8%.
- Permits also fell 3.9% month to month.
- Completions are up 11%.
- MBA Mortgage Applications Survey:
- The Mortgage Applications Composite Index rose 4.8%.
- Purchase activity increased 3.9%.
- Refinance activity increased 5.2%.
- Mortgage interest rates retracted slightly.
- Jobless Claims:
- Initial claims for unemployment insurance rose 4,000 to 352,000.
- The four-week moving average also rose 3,000 to 361,000.
- Continuing claims fell 35,000 to 3.1 million.
Earnings
- Citigroup, Inc. (NYSE: C)
- Citigroup reported first-quarter net income of $3.81 billion, or $1.23 a share, compared to $2.93 billion, or $0.95 a share, one year ago.
- Revenue increased 3% to $20.49 billion.
- Capital-markets activities contributed to the growth, with revenue from the segment increasing 31% to $6.98 billion.
- Citigroup reported first-quarter net income of $3.81 billion, or $1.23 a share, compared to $2.93 billion, or $0.95 a share, one year ago.
- M&T Bank Corporation (NYSE: MTB)
- M&T Bank reported first-quarter income of $255.1 million, or $1.98 per share, compared to $188.24 million, or $1.50 per share, last year.
- Excluding unrelated expenses, earnings were $2.06 per share.
- Analysts expected earnings of $1.96.
- Net interest income, on a taxable-equivalent basis, was $663 million, 6% higher than the prior year’s $627 million.
- This was helped by an increase in average earning assets, fueled by $5.4 billion of growth in average loans and leases.
- M&T Bank reported first-quarter income of $255.1 million, or $1.98 per share, compared to $188.24 million, or $1.50 per share, last year.
- The Coca-Cola Company (NYSE: KO)
- Coca-Cola reported earnings of $1.75 billion, or $0.39 per share, down from $2.1 billion, or $0.45 per share, one year ago.
- Excluding other charges, earnings were $0.46 cents per share, beating analysts’ estimates of $0.45 per share.
- Net revenue declined to $11.04 billion, from $11.14 billion, but still beats analysts’ predictions of $10.97 billion.
- Johnson & Johnson (NYSE: JNJ)
- Johnson & Johnson reported first-quarter profit fell just over 10% as it earned $3.5 billion, or $1.22 per share, down from $3.9 billion, or $1.41 per share, last year.
- Excluding litigation and acquisition-related charges profits beat analyst expectations by $0.04.
- Income would have been $4.1 billion, or $1.44 per share.
- Revenue totaled $17.51 billion, compared to $16.1 billion a year earlier.
- Analyst expected sales of $17.46 billion.
- Johnson & Johnson reported first-quarter profit fell just over 10% as it earned $3.5 billion, or $1.22 per share, down from $3.9 billion, or $1.41 per share, last year.
- Intel Corporation (NASDAQ: INTC)
- Intel reported worse-than-expected numbers on lagging computer sales.
- Intel Corp reported a profit of $2.05 billion, in comparison to $2.74 billion last year.
- Revenue fell to $12.58 billion from $12.91 billion.
- eBay Inc. (NASDAQ: EBAY)
- eBay reported earnings of $829 million, or $0.63 per share, compared with $725 million, or $0.55 a share, a year ago.
- Revenue was $3.75 billion, compared to $3.28 billion a year ago.
- Analysts expected $0.62 a share on revenue of $3.76 billion.
- eBay reported earnings of $829 million, or $0.63 per share, compared with $725 million, or $0.55 a share, a year ago.
- PepsiCo, Inc. (NYSE: PEP)
- PepsiCo reported net income of $1.08 billion, or $0.69 per share, in comparison to $1.13 billion, or $0.71 per share, last year.
- Analysts expected $0.71 per share.
- Excluding Venezuelan currency devaluation, restructuring charges and other items, earnings were $0.77 per share, beat the estimate.
- Revenue rose 1% to $12.58 billion.
- Verizon Communications Inc. (NYSE: VZ)
- Verizon reported profit of $1.95 billion, or $0.68 a share, compared to $1.69 billion, or $0.59 a share, year-over-year.
- Revenue increased to $29.42 billion.
- Analysts expected earnings of $0.66 on revenue of $29.55 billion.
Interest Rates
- Treasuries rose, pushing 10-year note yields to the lowest levels of the year, as signs of global economic weakness fueled demand for the safest assets.
- The two-year Treasury rate held flat at 0.23%.
- The five-year Treasury rate fell four basis points to 0.69%.
- The 10-year Treasury rate is at 1.69%, but hit a 2013 low on Monday.
- The 30-year Treasury yield remains below the one-year average of 2.90%, at 2.88%.
Disclosures
This article is meant to provide valuable background information on particular investments, NOT a recommendation to buy. The investments referenced within this article may currently be traded by Henssler Financial. All material presented is compiled from sources believed to be reliable and current, but accuracy cannot be guaranteed. The contents are intended for general information purposes only. Information provided should not be the sole basis in making any decisions and is not intended to replace the advice of a qualified professional, such as a tax consultant, insurance adviser or attorney. Although this material is designed to provide accurate and authoritative information with respect to the subject matter, it may not apply in all situations. Readers are urged to consult with their adviser concerning specific situations and questions. This is not to be construed as an offer to buy or sell any financial instruments. It is not our intention to state, indicate or imply in any manner that current or past results are indicative of future profitability or expectations. As with all investments, there are associated inherent risks. Please obtain and review all financial material carefully before investing. Henssler is not licensed to offer or sell insurance products, and this overview is not to be construed as an offer to purchase any insurance products.
