Factory orders post largest fall since recession; gains in orders outside transporation

WASHINGTON, Thu Oct 4, 2012 – Demand for U.S. factory goods in August fell by the most since January 2009, but the second straight month of gains in orders outside transportation hinted at a less rapid loss of momentum in manufacturing activity.

The Commerce Department said new orders for manufactured goods tumbled 5.2 percent – the biggest drop since the recession – dragged down by a slump in demand for transportation equipment that was telegraphed in last week’s report on orders for long-lasting manufactured goods.

Factory orders had risen 2.8 percent in July and economists had expected them to drop 5.8 percent in August. Excluding transportation, orders rose 0.7 percent in August after rising by the same margin the prior month.

Manufacturing has carried the economic recovery and while activity has cooled significantly in recent months, there are so far little signs of a hard landing.

The Institute for Supply Management’s index of national manufacturing activity last month climbed above the 50 mark – which separates contraction from expansion – after three straight months below 50.

The Commerce Department report showed orders for transportation equipment tumbled 34.9 percent in August on sharply weak orders for civilian and defense aircraft.

Oil costs cause first import price gain in five months

WASHINGTON, Wed Sep 12, 2012 – Import prices rose in August for the first time in five months as the cost of imported oil jumped, a factor that could weigh on American consumers and temporarily boost inflation.

Import prices climbed 0.7 percent last month, the Labor Department said on Wednesday.

The cost of petroleum imports increased 4.1 percent. Higher prices at the pump threaten to hurt consumers’ pocket books.

Analysts had expected overall import prices would rise 1.4 percent in August.

Many economists expect higher fuel costs will contribute to a short-term rise in inflation. At the same time, the U.S. Federal Reserve is still expected to ease monetary policy this week.

There was little sign of broader inflation pressures in the import data. Non-petroleum import prices declined 0.2 percent, a sign that the cooling global economy is reducing companies’ ability to raise prices.

Prices for imported consumer goods outside automobiles fell 0.3 percent, while prices were flat for cars and auto parts brought into the country.

Service sector picks up modestly in May, institute says

NEW YORK, Tue Jun 5, 2012 – The pace of growth in the vast services sector edged up in May driven by gains in new orders, a welcome comfort after recent disappointing economic data.

The Institute for Supply Management said on Tuesday its services index edged up to 53.7 from 53.5 in April; economists had expected the index to hold steady at April’s level.

A reading above 50 indicates expansion in the sector, which accounts for about two-thirds of economic activity.

Although the data offered a positive note after other recent signs suggesting the recovery is losing traction, the index was still well off the level of 57.3 seen in February.

“Overall, the data held up but is still at a low level, and I do not think this counters the significantly weak data we have been seeing,” said Tom Porcelli, chief economist at RBC Capital Markets in New York.

The survey’s forward-looking new orders component rose to a reading of 55.5 from 53.5, while the measure of prices paid declined to the lowest level since July 2009, at 49.8 from 53.6.

The decline in prices was attributed to lower fuel costs, said Anthony Nieves, chair of the ISM non-manufacturing index business survey committee.

ISM’s report on the manufacturing sector last week included a similar improvement in new orders, suggesting that signs of a softening pace of output and employment growth do not reflect a significant decline in demand, Peter Newland, a senior economist at Barclays, wrote in a note.

But the employment component fell to its lowest level since last November, adding to signs that job growth is slowing, after last week’s disappointing employment report. The index fell to 50.8 from 54.2.

Home prices gained in April, CoreLogic firm reports

NEW YORK | Tue Jun 5, 2012 – Home prices climbed in April in a fresh sign of stabilization for the housing market, data analysis firm CoreLogic said on Tuesday.

CoreLogic’s home price index rose 2.2 percent in April from the previous month and gained 1.1 percent from the year before.

Excluding distressed sales, prices jumped 2.6 percent for the month and were up 1.9 percent on a yearly basis. Distressed sales – which include foreclosed homes and properties where the homeowner is behind on payments – are often done at significantly reduced prices.

Prices have improved as the amount of homes available for sale have been whittled down, Anand Nallathambi, chief executive officer of CoreLogic, said in a statement.

“Home prices are responding to a restricted supply that will likely exist for some time to come — an optimistic sign for the future of our industry,” said Nallathambi.

Of the top 100 statistical areas measured by population, 44 showed year-over-year price declines, down from 54 in March.

McDonald’s April U.S. comparable sales miss estimates

OAK BROOK, Ill., Tue May 8, 2012 – McDonald’s Corp. reported a smaller-than-expected rise in April sales at established restaurants across the globe, hurt by a disappointing increase in its U.S. business.

Same-restaurant sales in the United States rose 3.3 percent. Analysts expected it to report a sales gain of roughly 5 percent.

McDonald’s shares fell 2.6 percent in premarket trade.

While McDonald’s is outperforming most of its peers, it also is sensitive to financial belt-tightening in Europe and higher food and labor costs in the United States.

Despite national debt woes, widespread austerity measures and high unemployment in Europe that have threatened demand in its top market, McDonald’s same-restaurant sales there rose 3.5 percent, above analysts forecasts of a gain of just over 3 percent.

Globally, the world’s biggest hamburger chain said on Tuesday that sales at restaurants open at least 13 months rose 3.3 percent globally.

Analysts polled by Thomson Reuters were looking for a worldwide sales gain of 4 percent, while those polled by Consensus Metrix had expected a gain of 4.3 percent.

February personal spending posts largest gain in 7 months

WASHINGTON, Fri Mar 30, 2012 – Consumer spending in February increased by the most in seven months even as income rose modestly, which could prompt analysts to scale back expectations of a sharp pull back in economic growth this quarter.

The Commerce Department said on Friday consumer spending rose 0.8 percent, as households probably stepped up purchases of motor vehicles, despite a spike in gasoline prices.

January’s spending was revised up to 0.4 percent from a previously reported 0.2 percent gain. Economists polled by Reuters had expected spending, which accounts for two-thirds of U.S. economic activity, to rise 0.6 percent last month.

When adjusted for inflation, spending rose 0.5 percent, the largest gain since September, after gaining 0.2 percent in January. That could cause analysts to raise their forecasts for 2 percent first-quarter growth.

The economy expanded at an annual rate of 3 percent in the final three months of 2011 as it got a boost from restocking by businesses, a stimulus that is expected to be lost this quarter.

Consumer spending rose at a 2.1 percent rate in the fourth quarter and last month’s increase suggested consumers were taking surging gasoline prices in stride, and saving less to supplement their low income.

Spending on goods meant to last more than three years rose 1.6 percent in February after advancing 1.4 percent the prior month. Spending on services rose 0.4 percent. Unseasonably warm weather had curbed demand for utilities in the prior months.

Investors roll the dice as Apple’s value booms

CUPERTINO, Calif. – Tue Mar 6: The world’s most valuable company has turned into a bit of a casino stock.

Since Apple Inc. on Feb. 29 became only the sixth company in U.S. history to top $500 billion in market capitalization, trading has become more volatile, indicating that more investors are tracking headlines and looking for quick gains.

Apple has gained 32 percent since the beginning of the year, outstripping its gains for all of 2011. It accounts for more than 4 percent of the weight of the S&P 500 index, a kind of outsized standing that has caused its moves to dictate market direction on a daily basis.

That’s a trend that is causing consternation among some players in the market. They note that other companies that had become members of the elite $500 billion club not only couldn’t sustain their standing, but weighed on the entire market as they fell.

For long-term investors, the stock of the iPad and iPod maker has been a winner, the ultimate in buying and holding. From a short-term basis, buyers have gotten much more fickle.

“Apple has become a favorite daytime trading stock for short-term traders. It’s one of the rare stocks that have momentum followers and that move on headlines that are not related to earnings,” said David Rolfe, chief investment officer at Wedgewood Partners in St. Louis, Missouri. The firm manages $1.5 billion in assets and owns Apple shares.

Intraday swings in Apple are at the most volatile levels since October last year. The swings have averaged around $12 a day for the past two weeks, compared with about $14 in October.

Best Buy impresses with market share, profit view

RICHFIELD, Minn. ― Best Buy Co. appeared to gain market share from rivals in the United States during the key holiday season and stood by its profit outlook for the financial year despite a 1.2 percent same-store sales decline in December.

The news boosted Best Buy shares nearly 3 percent and also allayed some concerns that all its holiday sales were driven by profit-sapping discounts.

The world’s largest consumer electronics chain said on Friday that sales at stores open at least 14 months fell 0.4 percent at its U.S. unit, while they slipped 4.3 percent internationally on weakness in Canada and Europe.

“Given competitor comments and supplier input, these are relatively impressive results,” Credit Suisse analyst Gary Balter said, adding that “the reconfirmation of… guidance by management should put to bed the worries of massive margin deterioration to drive those sales.”

While the international same-store sales number missed most analyst expectations, many such as David Strasser at Janney Capital Markets and Anthony Chukumba at BB&T Capital Markets said they were happy with Best Buy’s domestic performance, especially since they believe the chain gained market share in the United States during the key selling season.

“It does appear that Best Buy, at least from a brick-and-mortar perspective, picked up market share in December,” Chukumba said, pointing to weak performance in the consumer electronics sector by Costco Wholesale (COST.O) and Target Corp (TGT.N). Best Buy shares were up 2.9 percent at $24.12 Friday morning on the New York Stock Exchange.

“It is good enough from my perspective,” Chukumba said. “I am just happy they are going to make (profit numbers for) the quarter.”

Unlike the 2010 holiday season when Best Buy held the line on discounts and promoted only pricey goods, this time around it offered deep discounts on items ranging from flat-screen TVs to digital cameras.