Increase in Manufacturing Drives Stocks Higher
Business Roundup for Thursday, February 20
NEW YORK (AP) — Stocks are closing higher after news that manufacturing in the U.S. is expanding at a rapid clip. A private survey showed that manufacturing grew at the fastest pace in almost four years in February. The Dow Jones industrial average rose 92 points, or 0.6 percent, to 16,133 Thursday. The gain erased the Dow’s loss from the day before and left it flat for the week. The Standard & Poor’s 500 index rose 11 points, or 0.6 percent, to 1,839. The Nasdaq composite rose 29 points, or 0.7 percent, to 4,267. Safeway rose 2 percent after the grocer said it was in talks to put itself up for sale. Facebook rose 2 percent after announcing a deal to buy a popular messaging service called WhatsApp for $19 billion
NEW YORK (AP) — Wal-Mart has posted a 21 percent drop in fourth-quarter profit, and it’s giving a subdued forecast for the current quarter. The world’s largest retailer says a number of things have been keeping shoppers away, including bad weather and the expiration of a temporary boost in food stamps. New CEO Doug McMillon is promising to sharpen Wal-Mart’s focus on everyday low prices and speed up growth plans for its smaller Neighborhood Markets and Wal-Mart Express stores.
WASHINGTON (AP) — The pilots of a UPS cargo jet that crashed last August complained of tiring work schedules at the start of their fatal flight, and then made errors shortly before the plane flew into a Birmingham, Ala., hillside and burst into flames. That’s according to information presented to the National Transportation Safety Board today. The board was also told that the plane was equipped with an outmoded warning system to alert pilots when they are in danger of flying into the ground.
WASHINGTON (AP) — Employers can’t make new hires wait more than 90 days for coverage in a company health care plan, under rules issued today by the Labor Department. The new rule takes effect in 60 days. The Kaiser Family Foundation says nearly 80 percent of workers face a waiting period before coverage takes effect. The average wait is under two months, but 30 percent have to wait three months or more.
NEW YORK (AP) — Coca-Cola is raising its quarterly dividend by 9 percent. The next dividend is payable April 1 to shareholders of record as of March 14. Coca-Cola says raising the dividend to 30.5 cents from 28 cents reflects the confidence it has in its long-term cash flow.
WASHINGTON (AP) — The number of people seeking unemployment benefits has fallen slightly. The Labor Department says applications for jobless benefits dropped by 3,000 last week to a seasonally adjusted 336,000. The less volatile four-week average rose slightly to a seasonally adjusted 338,500. The average is roughly in line with pre-recession levels.
WASHINGTON (AP) — In the latest sign that inflation remains mild, the Labor Department says consumer prices barely rose last month. The consumer price index rose just 0.1 percent in January, down from a 0.2 percent gain in December. The small increase occurred even though cold weather pushed up the cost of natural gas, electricity and other home energy sources by the most in more than five years. That was offset by cheaper clothing, cars and air fares.
WASHINGTON (AP) — A measure of the U.S. economy’s health posted a moderate gain in January, suggesting the economy will continue to expand in the first half of this year. The Conference Board says its index of leading indicators rose 0.3 percent last month following no change in December and a solid 0.9 percent increase in November. The index is designed to signal economic conditions over the next three to six months.
WASHINGTON (AP) — Average rates on fixed mortgages are up slightly this week but remain near historically low levels. Mortgage buyer Freddie Mac says the average rate for the 30-year loan increased to 4.33 percent from 4.28 percent last week. The average for the 15-year mortgage edged up to 3.35 percent from 3.33 percent.
SEOUL, South Korea (AP) — A contraction in Chinese manufacturing and the possibility of higher U.S. interest rates dragged international stock markets lower today. China’s manufacturing tumbled to a seven-month low in February, according to the preliminary results of an HSBC survey of factory purchasing managers. Benchmark U.S. crude oil fell to just above $102.50 a barrel. The dollar fell against the yen and edged down against the euro.
WASHINGTON — Investors will be focused today on the government’s weekly jobless claims report. But they can also gauge inflationary pressures by reviewing the Consumer Price Index for January. Also due out are reports on Freddie Mac’s weekly mortgage rates and January’s leading economic indicators from the Conference Board. Wal-Mart Stores will report earnings before the bell.
TOKYO (AP) — Japan’s trade deficit surged to a monthly record of 2.8 trillion yen ($27.4 billion) in January as imports jumped 25 percent, underscoring the challenge the country faces in restoring export-driven growth. A weakening in the Japanese yen over the past year has failed to boost exports as much as hoped while imports of oil and gas, food and other products have surged. Consumers and businesses are thought to be stepping up purchases ahead of an April 1 sales tax hike.
BEIJING (AP) — China’s manufacturing contracted for a second straight month in February as a mainstay of the world’s No. 2 economy loses momentum amid government efforts to rein in credit and investment growth. The preliminary version of the HSBC Corp. purchasing managers’ index fell to a seven-month low of 48.3 from January’s 49.5 on a 100-point scale. Numbers below 50 show activity contracting.
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