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Market Update

U.S. Jobless Claims Rise 20,000; Existing Home Sales Gain 0.4%

Author: Nichole Harper
Last Update: 11:58 AM ET February 21 2013

11:55 AM New York Market indexes in New York declined after Fed comments rattled market nerves. Existing home sales increased 0.4% in January and inventories of unsold homes dropped 25% from a year ago month. Weekly jobless claims rose 20,000. Wal-Mart lifted its dividend.

Stocks opened lower in New York after weekly jobless claims rose and existing home sales increased 0.4% in January.

However, market sentiment was weak on the worries that the Federal Reserve may withdraw economic stimulus sooner than expected and China may tighten monetary policy.

Financial markets across Europe declined after the latest economic indicator in the euro zone suggested a decline in activities.

Euro zone service and manufacturing index shrank to 47.3 in February from 48.6 in January. A reading below 50 indicates a contraction.

The decline in growth rate suggested that economy in the euro zone may shrink in the first quarter to 0.5% as growth rates diverged between France and Germany.

Weekly Jobless Claims Rise, Home Sales Up 0.4%

Initial claims of unemployment increased 20,000 to 362,000 in the week ending February 16, according to the Labor Department.

Existing home sales increased 0.4% to a seasonally adjusted annual rate of 4.92 million, according to the latest data released by the National Association of Realtors.

The January month rate was the second highest since November 2009.

The unadjusted inventory of unsold homes declined 4.9% from December to 1.74 million, the lowest since 1999. Inventories declined 25.3% from a year ago month.

Median price of home for resale increased to $173,600 in January, an increase of 12.3% from a year ago.

Stocks in Review

Imax Corp (IMAX) increased 4% to $26 after the designer of digital imaging and sound technologies said adjusted earnings per share in the fourth quarter were 23 cents ahead of analyst estimate of 15 cents.

Tesla Motors, Inc. (TSLA) plunged 9.1% or $3.53 to $35.03 after the electric vehicles maker reported a larger than expected loss.

Total revenues in the fourth quarter ending in December surged nearly seven-fold to $306.3 million. Net loss in the quarter widened to $89.9 million or 79 cents a diluted share compared to $81.5 million or 78 cents a share a year ago earlier.

The company expects to deliver about 20,000 model S units in 2013 and in the first quarter deliver about 4,500 units.

VeriFone Systems (PAY) plunged 38% to $19.65 after the company guided April quarter adjusted earnings between 45 cents and 50 cents a share, lower than 75 cents expected by several analysts.

Wal-Mart Stores, Inc (WMT) jumped 2.3% or $1.60 to $70.81 after the largest retailer reported revenues in the fourth quarter ending in January advanced 4% to $127.1 billion from $122.3 billion in the same period of last year.

Net income in the quarter jumped 9% to $5.61 billion or $1.67 a diluted share compared to $5.16 billion or $1.50 a share a year ago.

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Sources: Data collected by 123jump.com and Ticker.com from company press releases, filings and corporate websites. Market data: BATS Exchange. Inc