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Market Update

U.S. Manufacturing Shrinks, Euro and Yen in Focus


Author: Nichole Harper
ticker.com
Last Update: 11:45 AM ET February 15 2013

11:40 AM New York – U.S. stocks traded sideways as earnings, deals and currency trading overshadowed market sentiment. The euro and yen were in focus ahead of comments from policymakers gathering from 20 nations in Moscow. U.S. industrial production declined in January.

Stocks in New York traded higher ahead of meeting of policymakers from 20 developing and developed nations in Moscow.

However, domestic earnings were in focus and the yen and the euro were the subject of wild speculation in the currency markets.

European markets were flat as finance ministers and central bankers from G20 nations gather in Moscow.

Investors are looking for clarity on the recent slide in yen and worried that it may spark another currency war in Asia. South Korea, Taiwan, and Europe are in direct competition with Japanese manufacturers to increase exports.

European Central Bank council member Jens Weidmann said in an interview, “The exchange rate of the euro is in with fundamentals. One cannot say that the euro is overvalued.”

U.S. industrial production unexpectedly shrank in January and output at factories, mines and utilities declined 0.1% after a 0.4% fall in December, according to the data released by the Federal Reserve released today.

Manufacturing declined 0.4% last month after increasing 1.1% in December and 1.7% in November. Motor vehicles and parts production declined 3.2% after rising 2.9% in November. Manufacturing accounts for 12% of all economic activities.

Senate Democrats released a plan of $110 billion spending cuts and tax increase to delay federal spending cuts, including tax increases. Republicans say they are not going to agree on the plan.

The U.S. government is facing automatic spending cuts and tax increases beginning March 1 totaling $1 trillion and ending in 2014.

Stocks in Review

Burger King Holdings, Inc., the fast food restaurant operator said sale in the fourth quarter ending in December grew 6% to $405 million.

Net income in the quarter jumped 61% to $81 million or 23 cents per diluted share compared to $50 million or 14 cents a share a year ago quarter.

CBS Corporation (CBS) climbed 3.8% or $1.66 to $44.60 after the media company stated revenue in the fourth quarter ending in December rose 2% to $3.7 billion.

Net earnings in the quarter climbed 6% to $393 million or 60 cents per diluted share compared to $370 million or 55 cents a share a year ago earlier.

Herbalife Ltd (HLF) surged 12.1% or $4.63 to $42.90 after the billionaire investor Carl Icahn filled to own 14 million shares of the company.

Kraft Foods Group, Inc. (KRFT) rose 9 cents to $47.25 after the food and beverage maker reported revenues in the fourth quarter ending in December dropped 11% to $4.94 billion.

Net income in the quarter tumbled 72% to $89 million or 15 cents per diluted share compared to $319 million or 54 cents a share a year ago.

Kraft Food expects net revenue for 2013 to be in line with the growth of the North American food and beverage market and earnings per share to be about $2.75, up from previous guidance of $2.60.

The J. M. Smucker Company (SJM) increased 1.5% or $1.31 to $93.47 after the food processing company stated net sales in the third quarter ending in December jumped 6% to $1.56 billion.

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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