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Market Update

U.S.Jobless Claims Rise 38,000; Income Surges on Dividend Payouts


Author: Nichole Harper
ticker.com
Last Update: 11:10 AM ET January 31 2013

10:45 AM New York Stocks in New York traded sideways after Chicago area manufacturing indicated expansion. Jobless claims increased 38,000 at the end of last week. Personal income rose 2.6% in December, the largest increase in nine years.

Stocks opened lowered after jobless claims last week rose more than expected and personal income rose the most in eight years.

The S&P 500 index increased 0.1% and the Nasdaq Composite Index added 0.2%.

The stocks staged a turnaround after the Chicago-area purchasing managers index for January increased to 55.6. A reading of 50 and higher indicates expansion.

Jobless Claims Rises, Personal Income Gains

The Labor Department said weekly applications for initial jobless claims increased 38,000 to 368,000 after adjusting for seasonality. The four-week average of claims which tend to smooth out other factors increased to 352,000, barely above a 4-year low.

The number of people collecting unemployment benefits increased 22,000 to 3.2 million in the week ending on January 19. Long term unemployment benefits recipients increased 418,000 to 2.11 million in the week ending on Jan 12.

Separately, Commerce Department said personal income increased 2.6% in December. The increase was the largest since December 2004 and above what economists had anticipated, 0.8% increase.

Personal income increase in November and December because companies accelerated dividend and special bonuses to beat the higher taxes that are expected to kick in this year, according to the Commerce Department.

Consumer spending increased 0.2% in December after rising 0.4% in November. After-tax income rose 2.7% in December, the largest increase since May 2008.

International Markets

Markets in Asia closed mixed. The Nikkei average declined 1% but recovered to close up 1% as the earnings season peaked. Nintendo lowered its sales outlook and Alps Electric said it plans to lay off 3,000 positions worldwide. For the month, the Nikkei added 7.2%.

Markets in Australia halted a ten-day rally after investors took profit ahead of earnings season next week. For the month, the ASX 200 index gained 4.6%.

The Sensex in Mumbai fell 0.5% and Reliance Industries places $800 million of perpetual bonds in the international markets. For the month, the Sensex added 2.4%.

Markets in Europe traded lower after German retail sales declined 1.7% in December. The indexes in 14 countries in the euro region declined.

Earnings Review

On the earnings front, Citrix Systems (CTXS) surged 10% after the software developer reported earnings and revenues that were ahead of expectations.

Nasdaq OMX (NDAQ) decreased 0.6% after the exchange operator reported earnings that topped estimates but guidance failed to spark interest among investors.

WMS Industries (WMS) surged 52% after Scientific Games (SGMS) agreed to acquire the gaming company for $1.5 billion. Scientific Games soared 17%.

Blackstone Group (BXG) increased 7% and the private equity firm reported increase in its management and performance fees.

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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