Stocks Open Slightly Higher, Some Earnings Beat
U.S. stocks opened slightly higher despite worse-than-expected weekly jobless numbers and growing recession fears.
The number of U.S. workers filing new claims for jobless benefits rose by 15,000, more than expected,last week, reinforcing evidence about the weak state of the labor market.
Asian stocks closed mostly lower but off the lows earlier in the session, while in Europe stocks were down between 1 and 3 percent.
The main question for everybody seems to be how bad a recession will be; most economists say the current downturn will be far harsher than the blip of the 1990-1991 or even 2000-2001 recessions.
Fears of a worse-than-expected downturn were intensified by reports of layoffs, the latest being about Goldman Sachs preparing to lay off 10 percent of its work force, according to the Wall Street Journal.
But the bad news was slightly offset by companies like Eli Lilly slightly beat expectations with earnings per share of $1.04 in the third quarter, excluding a charge, when its sales rose 14 percent to $5.21 billion, the company said in a statement.
Dow Chemical said on Thursday that third-quarter operating earnings fell, hurt by a decline in shipment volumes and hurricane-related shutdowns.
Altria's profit beat market forecasts by 2 cents in the third quarter, when adjusted earnings per share from continuing operations came in at 46 cents.
Unadjusted diluted earnings per share were 42 cents in the third quarter, compared with 43 cents a share in the year-ago period.
United Parcel Service , the world's largest package delivery company, reported a 9.9 percent drop in profit that was milder than Wall Street had feared, though the company said it experienced a significant slowdown as the quarter came to an end.
Efforts to alleviate the woes of the U.S. housing market, which started the world crisis, continue, with the Bush administration weighing a roughly $40 billion proposal to help forestall housing foreclosures, according to a report in the same paper.
U.S. foreclosure activity in September rose 21 percent from a year earlier but fell by double-digits from the prior month as some state laws slowed the foreclosure process, according to a monthly report by research firm RealtyTrac.
But there are reports that some buyers are trickling back to the housing market, attracted by rock-bottom prices.
In other earnings news, Amazon.comcut its 2008 revenue and income forecasts after the bell Wednesday, saying sales in the holiday quarter would fall short of Wall Street expectations, and its shares plunged in after hours trading.
Also after the bell, Amgen reported a much better-than-expected third-quarter profit and raised its full-year earnings forecast as it reversed the decline in sales of its top-selling anaemia drug that had been hit by safety concerns and reimbursement restrictions.
Still to Come:
THURSDAY: Weekly natural-gas inventories; Earnings from Microsoft after the bell
FRIDAY: Existing-home sales; Earnings from LM Ericsson
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