U.S. MARKET AVERAGES
Stock markets opened lower, extending the three-consecutive-sessions decline with seven of ten economic sectors down. The main reason for the lower start is undoubtedly Hurricane Rita of category 5 which has gathered strength along its march towards the Texas coast, sending oil prices near $68 a barrel and making oil majors evacuate their rigs in the Mexican Gulf.
The second hurricane after devastating Katrina raises concerns about its impact on gasoline prices which could hurt consumer spending, the key indicator of economic growth.
Markets also weigh initial claims which were the highest since July 2003, but came below the average analysts’ estimate of 440,000.
With the market worried about the impact of rising energy costs on the economy, investors will be paying close attention to the Conference Board's monthly survey of U.S. leading indicators.
Homebuilder sector has risen 0.7% on strong quarterly report from KB Home
Oil stocks are benefiting from the increase of oil prices, with a notable gain by ExxonMobil
). The sector is up 1.2%
Tech sector posted considerable losses with semiconductor and disk drive stocks being under pressure.The weak market brought significant losses to airline stocks like Continental
), which have been suffering on the back of surging oil prices. The sector is currently down 1.8%.
The Dow Jones Industrial Average slipped 22 points to 10,355, after closing out Wednesday's session at its lowest level since July 7. The Nasdaq fell 13 points to 2,093 while the S&P 500 Index dropped 3 points to 1,206.
On the bond market, long-term U.S. treasury prices turned lower after the weekly jobless claims data came in better-than-expected. The benchmark 10-year note was off 1/32 at 100 18/32, with its yield at 4.18% vs. 4.17% at Wednesday's close.
MOVERS AND SHAKERS
) advanced 1.4% after posting first-quarter results that were over the expectations. The company also restated its profit prospect for year 2006.
) gained 2.3% after the telecommunications company narrowed its forecast for cost savings for the recently joined company by 20%.
) dropped 4.7% after the company posted yesterday a second-quarter earnings that were below analyst predictions, and presented a worst-than-expected third-quarter outlook.
), the New York publisher, announced a lower first-quarter loss and repeated its earnings forecast for fiscal 2006. The loss for the quarter ended August 31 fell to $21.2 million from $50.5 million a year earlier.
) could gain in early trading after the company was upgraded at UBS to buy from neutral, citing valuation. The company fell 1.3% yesterday.
UNEMPLOYMENT INSURANCE WEEKLY CLAIMS REPORT
SEASONALLY ADJUSTED DATA
Thursday morning, the Department of Labor released its report on initial jobless claims in the week ended September 17. The report showed that claims increased only modestly compared to a significantly upwardly revised figure for the previous week.
The Labor Dept. said that jobless claims rose to 432,000 from the previous week's revised figure of 424,000. Economists had expected claims to rise to 450,000 from the 398,000 originally reported for the previous week.
The upward revision to the previous week's figure reflected an increase in claims made by people dislodged by the Hurricane Katrina disaster.
The report also showed that the 4-week moving average rose to 376,250 from the previous week's revised average of 347,250. This marks the sixth consecutive increase for the less volatile moving average.
The Labor Dept. also said that continuing claims rose to 2.666 million from the preceding week's revised level of 2.578 million.