Markets
For the week of Monday, April 1, 2013 through Friday, April 5, 2013:
- Standard & Poor’s 500 Index: -0.98%
- Dow Jones Industrial Average: -0.06%
- NASDAQ Composite: -1.92%
On Monday, U.S. stocks started the second quarter down as a result of disappointing manufacturing data. Industrial stocks led eight out of 10 industry sectors lower. On Tuesday, investors pushed U.S. stocks to new highs as investors put their focus on healthcare stocks. Internationally, Cyprus’ government received a year’s reprieve on its debts; however, concern and caution remains on the horizon.
Stocks fell again midweek on disappointing readings for U.S. growth. The U.S. markets began with gains on Thursday, but the enthusiasm from Japan’s monetary stimulus waned. U.S. jobless claims rose to a four-month high. The markets closed down on Friday amid an employment report that came in well below expectations. Employers only added 88,000 jobs in March. While the unemployment rate fell to 7.6%, the decline was a result of more workers dropping out of the labor force.
Economic Data
- Institute for Supply Management Manufacturing Index:
- The ISM manufacturing index for March fell from 54.2 to 51.3, putting the index at its lowest level since December.
- Both production and new orders were down by more than five points, while the employment and trade details were up.
- The inventories index fell back below the neutral threshold of 50.
- Chain Store Sales Snapshot:
- Demand for Easter merchandise lead to the largest weekly gain in the chain store sales index history, as it rose 4.7% in the latest week.
- Year-over-year growth was up from 1% last week to 1.9%.
- However, it is still short of the 2.2% year-to-date average.
- Factory Orders:
- Meeting expectations, orders for manufactured goods increased 3% in February.
- Previous durable goods orders were revised down 5.7% to a 5.6% gain.
- Core capital goods orders were revised down to a 3.2% decline, rather than the previously reported 2.7% decrease.
- Shipments rose 1%, unfilled orders rose 0.9%, and inventories grew 0.2%.
- Core capital goods shipments grew 1.9%.
- Meeting expectations, orders for manufactured goods increased 3% in February.
- MBA Mortgage Applications Survey:
- The mortgage applications composite index fell 4% during the week.
- Purchase activity improved slightly.
- The refinance index fell 5.6%.
- Institute for Supply Management Services Index:
- The ISM nonmanufacturing index fell from 56 to 54.4 for March, as services weakened.
- New orders, employment and export orders declined between February and March, which was in line with the forecast of slowing growth.
- The business activity index fell from 56.9 to 56.5
- This was in line with the normal slowdown in March.
- Jobless Claims:
- Initial jobless claims rose 28,000 to 385,000 for the third straight week.
- The reading can be volatile, with school spring breaks and the holidays.
- If the reverse does not change in the next few weeks, it could be a sign the economy has lost more momentum.
- Initial jobless claims rose 28,000 to 385,000 for the third straight week.
Earnings
- McCormick & Co Inc. (NYSE: MKC)
- McCormick & Company announced a 3% increase in sales for the first quarter to $94 million.
- Earnings per share were $0.57 versus $0.55 in the first quarter of 2012.
- McCormick also reaffirmed its 3% to 5% sales growth and 2013 earnings of $3.15 to $3.23 per share.
- McCormick & Company announced a 3% increase in sales for the first quarter to $94 million.
- ConAgra Foods Inc. (NYSE: CAG)
- ConAgra Foods reported a third-quarter profit that fell shy of Wall Street expectations, as a result of costs associated with the purchase of Ralcorp Holdings.
- ConAgra Foods Inc. reported net income of $123.4 million for the quarter, down from $280.7 million in the quarter one year ago.
- After adjusting for the purchase of Ralcorp, operating profit was $22 million.
- Net sales for ConAgra increased 13% to $3.85 billion compared with $3.4 billion in the same quarter last year.
- Jos. A. Bank Clothiers Inc. (NASDAQ: JOSB)
- Jos. A. Bank Clothiers Inc. reported a fourth quarter profit drop of 36%.
- Because we experienced unseasonably warm weather, customers were buying fewer sweaters, outerwear and jackets during the Christmas season.
- Surpassing expectations, Jos. A. Bank’s reported net income $28.4 million, or $1.01 a share, compared to $44.1 million, or $1.58 a share a year ago.
- For the quarter, net sales rose to $354.8 million compared to $346.3 million in the same quarter a year ago.
- For the year, net income was down 18.3% to $79.7 million, or $2.84 a share, compared to $97.5 million, or $3.49 a share, in fiscal 2011.
- Revenues for 2012 increased 7.1% to $1.05 billion, marking the first time the retailer topped $1 billion in sales.
- Jos. A. Bank Clothiers Inc. reported a fourth quarter profit drop of 36%.
- Monsanto Co. (NYSE: MON)
- Monsanto earned $1.48 billion, or $2.74 per share, up from $1.21 billion, or $2.24 per share, a year ago.
- Earnings topped Wall Street’s estimates of $2.56 per share on sales of $5.27 billion.
- Monsanto’s sales increased 15% to $5.47 billion.
- Monsanto earned $1.48 billion, or $2.74 per share, up from $1.21 billion, or $2.24 per share, a year ago.
M&A Activity and More:
- $14 Million SAC Settlement Is Approved:
- The Federal District Court in Manhattan approved a deal on Friday in which SAC Capital Advisors agreed to pay $14 million to settle accusations by the Securities and Exchange Commission.
- The SEC claimed the fund’s Sigma Capital unit illegally traded in shares of technology companies after a former analyst obtained secret information about the companies.
- As part of the agreement, SAC neither admitted nor denied wrongdoing.
- The Federal District Court in Manhattan approved a deal on Friday in which SAC Capital Advisors agreed to pay $14 million to settle accusations by the Securities and Exchange Commission.
Interest Rates
- The two-year Treasury rate lost two basis points to 0.22%.
- The five-year Treasury rate fell to its lowest rate in 2013, falling more than six basis points to 0.70%.
- The 10-year Treasury rate slid seven basis points to 1.78%, still near the 2013 low.
- The 30-year Treasury yield fell nine basis points to 3.02%, barely above the key 3% level.
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.
