Archive for April, 2009

FTSE 100 ends higher, Barclays surges (AFP)

Thursday, April 9th, 2009 | Finance News

LONDON (AFP) –
Stocks in London ended the day higher on Thursday despite showing little reaction to the to a decision by the Bank of England to leave interest rates at 0.5 percent.

The FTSE 100 index closed up 58.19 points -- or 1.48 percent -- at 3,983.71.

"The markets know that the Bank of England has no wriggle room on interest rates," noted Manoj Ladwa, senior trader at ETX Capital.

On the corporate front, shares in Barclays shot up 12.5 percent -- or 19.7 pence -- to close at 177.5 after it said it would sell its iShares exchange-traded fund business to CVC Capital Partners for three billion pounds.

However, metals miner Vedanta Resources pipped the banking giant to lead the risers, climbing a hefty 13 percent -- or 100.5 pence -- to finish at 873.5, while the worst blue chip performer was Imperial Tobacco, slipping 3.59 percent -- or 55 pence -- to finish at 1477.

It was losely followed by confectionery giant Cadbury's, which fell 3.36 percent -- or 18 pence -- to end at 517.

Vodafone was the most widely traded stock, seeing 151 million shares change hands, followed by Royal Bank of Scotland (RBS), which saw 128 million units switch owners.

Elsewhere, the pound ended the day lower against the US dollar but higher against the euro.

Sterling was worth 1.4621 dollars at 15:58 GMT, down from 1.4717 at Wednesday's close, while it climbed to 1.1107 euros from 1.1084 over the same period.

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Retailers’ sales may signal shopper confidence (Reuters)

Thursday, April 9th, 2009 | Finance News

NEW YORK (Reuters) –
Many U.S. retailers posted smaller-than-expected sales declines for March in a sign that shoppers may be regaining confidence to open their wallets after more than a year of recession.

Of the two dozen or so retailers that have reported March sales at stores open at least a year, more than half topped Wall Street estimates, and a handful even raised their quarterly earnings outlooks on Thursday.

"The numbers are still soft, but given the deluge of negative news we have seen in the retail space over the last several months, it's got to be somewhat encouraging," said Ken Perkins, president of Retail Metrics Inc. "It looks like there is a little bit of an uptick, some pent-up demand ... for some discretionary spending."

Yet Perkins cautioned against reading too much into the results. "It is difficult to foresee that really rallying and spiking in the near term," he said.

The International Council of Shopping Centers said it expected overall U.S. same-store sales to rise 1 percent to 2 percent in April and be flat to up 1 percent in May.

Meanwhile, the March results pleased investors. The Standard & Poor's Retail Index (.RLX) rose 3.2 percent in morning trading, outpacing a 2.2 percent gain in the wider S&P 500 Index (.SPX).

A notable exception was Wal-Mart Stores Inc (WMT.N), which reported a lower-than-expected 1.4 percent rise in March U.S. same-store sales, as a later Easter this year hurt sales at its namesake discount stores. Analysts on average were expecting a 3.2 percent rise, according to Thomson Reuters data.

At Wal-Mart's Sam's Club warehouse stores, discretionary categories such as jewelry, mattresses and furniture remained weak.

But Wal-Mart, whose shares fell 4.3 percent, said it expected earnings to be at the high end of its forecast for the fiscal first quarter, which ends April 30.

EASTER SHIFT

According to Thomson Reuters' revenue-weighted same-store sales index, overall sales fell 1.8 percent, double the expected decline, due largely to Wal-Mart's results. Excluding Wal-Mart, sales fell 5 percent, slightly better than the 5.2 percent drop that analysts expected.

Costco Wholesale Corp (COST.O) also disappointed, with a 5 percent decline in March same-store sales, compared with analysts' expectations for a 1.7 percent fall. The company cited weakness in nonfood categories and lower gasoline prices.

Excluding the impact of lower gas prices, Costco posted a 4 percent gain. The warehouse club operator benefited from the later Easter, which brought an extra day of business in March because it did not have to close its stores for the holiday.

The later Easter was not good news for everyone.

Specialty apparel and accessories retailers American Eagle Outfitters Inc (AEO.N), Aeropostale Inc (ARO.N), Zumiez Inc (ZUMZ.O), Stage Stores Inc (SSI.N) and Wet Seal Inc (WTSLA.O) reported worse-than-expected March sales results, saying the timing of Easter allowed consumers to put off buying holiday-related goods like spring dresses and shoes.

Stage Stores and Wet Seal both said that in order to get a truer sense of their early spring sales trends, it will be necessary to look at the March and April periods together.

While retailers suffered from the Easter shift in March, they should get the "flipside" in April, said Michael Niemira, chief economist at the International Council of Shopping Centers.

Along with the later Easter come later spring breaks from many schools and universities. This hurt retailers such as Aeropostale and American Eagle, which cater to teens and young adults. American Eagle's March sales fell 16 percent, while analysts were expecting a 10.4 percent decline.

Nonetheless, American Eagle raised the bottom end of its quarterly earnings outlook, since it did a better job of controlling discounts, and its shares jumped nearly 9 percent.

Limited Brands Inc (LTD.N) reported a 9 percent decline in March same-store sales, surprising analysts who expected a 12 percent drop. The company cited better-than-expected results at its Victoria's Secret and Bath & Body Works chains and said its total April same-store sales should be down in a mid-single-digit percentage range. Its shares rose more than 6 percent.

(Additional reporting by Aarthi Sivaraman in New York, Nicole Maestri in San Francisco, Dhanya Skariachan in Bangalore and Jessica Wohl and Ben Klayman in Chicago; Editing by Lisa Von Ahn)

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Obama: Timing right for millions to refinance (AP)

Thursday, April 9th, 2009 | Finance News

WASHINGTON – Declaring "good news" in the midst of an economic meltdown, President Barack Obama on Thursday urged families to take advantage of near-record low mortgage rates by refinancing their home loans.

"We are at a time where people can really take advantage of this," Obama said, seated with a handful of homeowners who have already lowered their bills.

Rates on 30-year mortgages inched upward this week but remain near the lowest level in decades, allowing borrowers with strong credit and stable jobs to save money if they refinance.

The average rate on a 30-year fixed-rate mortgage rose to 4.87 percent this week, up from 4.78 percent last week, Freddie Mac reported Thursday. That was the lowest in the history of the survey, which dates back to 1971.

Low rates have sparked a surge in refinancing activity, with nearly 80 percent of new home loan applications coming from borrowers seeking to refinance. Freddie Mac's sibling company, Fannie Mae, refinanced $77 billion in loans last month, nearly double February's volume.

"The main message we want to send today is there are 7 to 9 million people across the country who right now could be taking advantage of lower mortgage rates," Obama said in a photo opportunity in the Roosevelt Room. "That is money in their pocket."

Last month, the Obama administration unveiled a new plan to provide $75 billion in incentives for the mortgage industry to modify loans to help borrowers avoid foreclosure.

On Thursday, the president encouraged people to take advantage of a government Web site — http://www.makinghomeaffordable.gov — to see how they can get help.

Obama also warned people to watch out for scam artists, days after his administration

"If somebody is asking you for money up front before they help you with your refinancing," he said, "it's probably a scam."

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AP Business Writer Alan Zibel reported from New York.

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