Business Blog Posts

The S&P 500 is up 6.5 percent so far this month, putting it on track for the best December since 1991.

Reports on the labor market, business activity and housing all showed surprising strength.

New U.S. claims for initial unemployment benefits in the latest week dropped to the lowest level since July 2008, while a report from the Institute for Supply Management-Chicago showed business activity in the U.S. Midwest rose to its highest level since July 1988. November pending home sales also rose more than anticipated.

"The numbers were very strong this morning, but people are becoming more cautious since it's the end of the year, especially since we've already had a great run," said Bruce McCain, chief investment strategist at Key Private Bank in Cleveland, Ohio.

Monster Worldwide Inc (MWW.N), an employment agency, rose 2.1 percent to $24.12 after the jobless data. The Dow Jones U.S. business training and employment agencies index .DJUSBE rose 0.3 percent.

In a sign of investor anticipation of increased merger activity, Anadarko Petroleum Corp (APC.N) jumped 6.9 percent to $75.59 after the UK's Daily Mail reported BHP Billiton Ltd (BHP.AX) (BHP.N) may be lining up a $90 per share offer for the company.

The Dow Jones industrial average .DJI was down 15.67 points, or 0.14 percent, at 11,569.71. The Standard & Poor's 500 Index .SPX was down 1.86 points, or 0.15 percent, at 1,257.92. The Nasdaq Composite Index .IXIC was down 3.95 points, or 0.15 percent, at 2,662.98.

Technical indicators such as the S&P 500's relative strength index and elevated levels of bullishness are leading some investors to call for a pullback.

Though many predict stocks will pull back in January, Peter Kenny, managing director at Knight Equity Markets in Jersey City, New Jersey, does not see that happening until February.

"The common sense of the street is that we get pullback after this Santa Claus rally and a very strong run-up in the S&P since August," he said. "But I don't think it will be in early January because everybody is expecting it."

The S&P is up more than 14 percent since August, contributing to a reluctance to make large bets as light volume leaves the market more susceptible to volatility.

February crude futures fell 1.9 percent to $89.35 per barrel after the latest U.S. inventory data, though the drop had little impact on energy companies.

(Editing by Leslie Adler)

New applications for unemployment benefits dropped 34,000 last week to 388,000, the lowest level since July 2008, while factory activity in the Midwest expanded in December at its fastest pace in more than 22 years.

Further brightening the picture, pending sales of previously owned homes rose more than expected in November.

The data was the latest in a series, ranging from retail sales to trade, to suggest the recovery has picked up steam.

"The economy is heading into 2011 with some pretty good momentum and some pretty good wind behind its sails right now," said Omair Sharif, an economist at RBS Securities in Stamford, Connecticut.

The reports had a minimal impact on U.S. financial markets, where volumes were light and investors moved to the sidelines as the year wound down.

Prices for U.S. government debt were mostly marginally down, while the dollar rebounded from a seven-week low against the yen. U.S. stock indexes were flat to slightly lower.

Economists, who had expected initial claims for jobless benefits to dip only to 415,000, said the Christmas holiday-shortened week may have led to data distortions.

However, analysts said that did not change the view that the labor market was gaining strength. A four-week average of new claims -- a better measure of underlying trends -- also touched its lowest level since July 2008.

"There's no denying that the economy is improving," said Wayne Kaufman, chief market analyst at John Thomas Financial in New York.

BULLISH SIGNAL FROM MANUFACTURING

The Institute for Supply Management-Chicago's business barometer for the Midwest provided an even more bullish signal.

It jumped to 68.6, the highest since July 1988, from 62.5 in November. Economists had expected it to dip. Any reading above 50 indicates the region's economy is expanding.

The gauge, which closely correlates to the Institute for Supply Management's report on national manufacturing due on Monday, mirrored strong gains in measures of factory activity in other regional surveys reported last week.

In a third report, the National Association of Realtors said its pending home sales index, which is based on signed contracts to buy previously owned houses, rose 3.5 percent last month to 92.2. It was the second straight month of gains and beat market expectations for a 2 percent increase.

Rattner also agreed to be banned from appearing in any capacity before any public pension fund in New York for five years.

Attorney General Andrew Cuomo announced the settlement, which ends two lawsuits by his office. These had sought to recover at least $26 million from Rattner and permanently bar him from the securities industry in New York.

Rattner is the last major figure to resolve allegations by Cuomo in the attorney general's long-running investigation into alleged wrongdoing in the roughly $130 billion New York State Common Retirement Fund.

Cuomo said he has won eight guilty pleas in the probe, including from former state comptroller Alan Hevesi, and more than $170 million of settlement payments.

The Rattner settlement "resolves the last major action of our multi-year investigation," Cuomo said in a statement. "We have been able to help restore and protect the integrity of the state pension fund."

In a statement released by Cuomo, Rattner said he was pleased to settle, and that the accord "allows me to put this matter behind me. I apologize if during the course of this process there is anything I did that may have made reaching this agreement more difficult."

Cuomo and the U.S. Securities and Exchange Commission had accused Rattner of entering quid pro quo arrangements with the pension fund to win $150 million of business in 2005 and 2006 for Quadrangle Group, the private equity firm he co-founded and worked for at the time. He no longer works there.

Rattner entered a civil settlement last month with the SEC, agreeing to pay $6.2 million and accept a two-year ban from working with an investment adviser or broker-dealer.

Quadrangle, Rattner and Rattner's lawyer were not immediately available for comment on Thursday.

Cuomo will become New York's governor on January 1.

(Reporting by Jonathan Stempel in New York; Additional reporting by Nadia Damouni, editing by Dave Zimmerman)

The 3-year-old online discount coupon company raised the funds, according to a regulatory filing on Thursday, after reports last month that it was in talks to sell itself to Google Inc for up to $6 billion.

Had the talks been successful, it would have been Google's biggest acquisition.

Groupon did not disclose the names of the investors. Company executives could not be reached for a comment.

The bulk of the funds raised -- $344.5 million -- will be used to buy back stock from existing shareholders, the company said in a filing with the U.S. Securities and Exchange Commission.

Its shareholders include Chief Executive Andrew Mason and Digital Sky Technologies, which also is an investor in Facebook.

"That is a nice little chunk of change," said Justin Byers, head of business intelligence for VC Experts, a firm that follows investments in private companies.

Analysts estimate it has annual revenue ranging from $500 million to $2 billion. It sends members daily e-mails with discounts from local merchants. The discounts are activated when a certain number of people agree to make a purchase.

(Reporting by Jim Finkle; Editing by Derek Caney)

Initial claims for state unemployment benefits fell 34,000 to a seasonally adjusted 388,000, the lowest reading since early July 2008, the Labor Department said on Thursday. That was well below economists' expectations for 415,000.

The prior week's claims figure was revised modestly up to 422,000 from the previously reported 420,000. A Labor Department official said there was nothing unusual in the state-level data and described the report as clean.

"This adds to the idea that the jobs picture is improving ... this is another feather in the cap of the idea of recovery," said Adam Sarhan, chief executive of Sarhan Capital in New York.

U.S. Treasury debt prices, already soft before the data, lost more ground, while the dollar pared losses against the yen. S&P stock index futures trimmed losses.

The four-week average of new jobless claims, considered a better measure of underlying labor market trends, fell 12,500 to 414,000, the lowest level since the week ending July 26, 2008.

The steady decline in claims in recent weeks likely indicates the pace of job creation picked up this month, after the Labor Department's non-farm payrolls report showed employers added a paltry 39,000 jobs in November.

The December employment data is due on January 7, and a preliminary Reuters survey shows economists expect non-farm payrolls increased 126,000 this month, but still not enough to significantly reduce the unemployment rate, which is expected to have edged down to 9.7 percent from 9.8 percent in November.

The claims data also showed the number of people still receiving benefits under regular state programs after an initial week of aid rose 57,000 to 4.13 million in the week ended December 18, above market expectations for 4.10 million. The prior week's figure was revised slightly up to 4.07 million.

The so-called continuing claims data covered the survey week for the December employment report's household survey from which the unemployment rate is derived.

The jobless rate is likely to remain elevated as the improving labor market and general economic conditions lure discouraged job seekers back into the labor force.

The number of people on emergency unemployment benefits fell 77,741 to 3.71 million in the week ended December 11, the latest week for which data is available.

A total of 8.87 million people were claiming unemployment benefits during that period under all programs.

Initial claims for state unemployment benefits fell 34,000 to a seasonally adjusted 388,000, the lowest reading since early July 2008, the Labor Department said on Thursday. That was well below economists' expectations for 415,000.

The prior week's claims figure was revised modestly up to 422,000 from the previously reported 420,000. A Labor Department official said there was nothing unusual in the state-level data and described the report as clean.

The four-week average of new jobless claims, considered a better measure of underlying labor market trends, fell 12,500 to 414,000, the lowest level since the week ending July 26, 2008.

The steady decline in claims in recent weeks likely indicates the pace of job creation picked up this month, after the Labor Department's non-farm payrolls report showed employers added a paltry 39,000 jobs in November.

The December employment data is due on January 7, and a preliminary Reuters survey shows economists expect non-farm payrolls increased 126,000 this month, but still not enough to significantly reduce the unemployment rate, which is expected to have edged down to 9.7 percent from 9.8 percent in November.

The claims data also showed the number of people still receiving benefits under regular state programs after an initial week of aid rose 57,000 to 4.13 million in the week ended December 18, above market expectations for 4.10 million. The prior week's figure was revised slightly up to 4.07 million.

The so-called continuing claims data covered the survey week for the December employment report's household survey from which the unemployment rate is derived.

The jobless rate is likely to remain elevated as the improving labor market and general economic conditions lure discouraged job seekers back into the labor force.

The number of people on emergency unemployment benefits fell 77,741 to 3.71 million in the week ended December 11, the latest week for which data is available.

A total of 8.87 million people were claiming unemployment benefits during that period under all programs.

The S&P 500 .SPX is heading for its best December in nearly two decades. The index has gained 6.7 percent so far this month and rose in 17 of the last 20 sessions.

Volumes, however, were expected to remain thin due to the year-end holiday period.

The Chicago Purchasing Managers Index (PMI), due at 1445 GMT (9:45 a.m. ET), is likely to give the market some direction.

The index has been running hotter than most other manufacturing indicators but the gap is expected to have narrowed a bit in the December reading, with analysts forecasting a drop to 61.0 from 62.5 the month before.

Other data likely to be closely watched include pending home sales for November, which is expected to show a slight dip, and weekly jobless claims which is seen extending a seasonal slide heading into the last week of December.

In company news, U.S. health regulators have approved Endo Pharmaceuticals Holding Inc (ENDP.O) and ProStrakan Group PLC's (PSK.L) Fortesta testosterone gel to treat men with low levels of the hormone.

Lockheed Martin Corp (LMT.N) and the U.S. unit of Australia's Austal Ltd (ASB.AX) won U.S. Navy contracts potentially worth more than $3.5 billion each to design and build up to a combined total of 20 coastal combat ships through 2015.

A blizzard in the U.S. Northeast this weekend postponed about $1 billion in holiday retail sales by keeping shoppers away from stores in the days after Christmas, research firm ShopperTrak said.

In Europe, the pan-European FTSEurofirst 300 .FTEU3 index of top shares was slightly weaker in early trade, pausing for breath following a rally in December which has put equities on track to post their biggest monthly rise in 17 months.

(Reporting by Harpreet Bhal; Editing by Mike Nesbit)

Going from strength to strength, copper scaled a fresh peak at $9,540.75 a tonne, while U.S. crude oil held within a whisker of a 2-year high near $92 a barrel, reflecting growing optimism for global growth.

For now, investors seemed to be cheering prospects for a stronger U.S. recovery in 2011 and ongoing strength in Asia, while shrugging off the risk of more interest rate hikes in emerging economies like China as they deal with inflation and any flare up of the euro zone sovereign debt crisis.

A private survey on Thursday showed China's vast manufacturing sector continued to expand strongly toward the year-end, albeit at a slightly slower pace than in November.

Overall, analysts believe 2011 will be another positive year for equities, particularly as ultra-low interest rates in major economies mean there will be plenty of cash looking for better returns.

"While GFC (global financial crisis) aftershocks will continue to cause volatility and shares are becoming vulnerable to a short term correction in January after several months of very strong gains, shares are likely to put in good gains through 2011 as a whole," said Shane Oliver, head of investment strategist at AMP Capital Markets.

MSCI's index of Asia Pacific stocks excluding Japan .MIAPJ0000PUS rose 0.6 percent, and was up almost 15 percent this year.

This compared with a rise of 10 percent for the MSCI World stock index .MIWD00000PUS, 13.5 percent for the MSCI America index .MIAM00000PUS and a paltry 1.3 percent for European stocks .MIER00000PUS.

South Korea's KOSPI .KS11 rose 0.4 percent, closing the year some 22 percent higher, while Indonesia's IDX Composite index .JKSE, the region's star performer, advanced 0.4 percent on Thursday, chalking up a whopping 47 percent for this year.

In contrast, Japan's Nikkei .N225 fell 1.1 percent as investors sold some of the major exporters like Toyota Motor (7203.T) on a firmer yen. The index ended the year down about 3 percent, making it one of the worst performers in the region.

"The recent advance of the yen has been a bit unexpected and clearly having a negative psychological impact on share prices," said Takashi Ohba, a senior strategist at Okasan Securities.

Market participants, however, believe Japanese stocks are undervalued compared with other developed markets, suggesting scope for the laggard to make up some lost ground in 2011.

Many Asian markets including Japan, South Korea, Thailand, Indonesia, the Philippines and Malaysia will be shut on Friday, while others like Australia will have half-day sessions.

DOLLAR WILTS

The yen rose to highs not seen since November 9 as the dollar fell across the board after traders took a steep decline in U.S. Treasury yields overnight as a signal to sell the greenback.