Stocks Lower After Data, Central Bank Moves

Morningstar

U.S. Market
Stocks fell this morning after jobs data and central bank actions in Europe.

Initial unemployment claims fell 15,000 last week to 330,000. Economists had expected a more modest decline. The less volatile four-week moving average dropped by 9,750 to 349,000 in the week. Separately, Challenger, Gray & Christmas said that planned layoffs fell 32% during December to the lowest level in more than 13 years. The jobs data comes ahead of tomorrow’s closely-watched payroll and unemployment rate report.

As expected, both the Bank of England and the European Central Bank left key interest rates unchanged today. The BOE also left its quantitative easing program untouched. ECB head Mario Draghi stressed in a press conference that his bank intends to keep rates low for as long as necessary and that they will take action to prevent inflation from becoming too low.

At midday the S&P 500, Dow and Nasdaq were down 0.2%, 0.3% and 0.4% respectively.

Stocks on the Move
Shares of Family Dollar (FDO) dropped almost 7% after the firm reported disappointing first-quarter results and provided anemic guidance. The firm saw profit fall to $78 million (68 cents a share) from $80.3 million (69 cents a share) in the year ago quarter. Management said they now expect same-store sales to rise in the low single digits for the current quarter.

The power of Macy's (M) localized merchandising and omnichannel capabilities were on display during the fourth quarter, as the company announced a series of positive data points including stronger-than-expected holiday sales, an upbeat comparable sales and earnings outlook for 2014, and cost-reduction initiatives. Comparable sales rose 4.3% in November and December. Shares soared over 7% on the earnings report.

Ford (F) announced that it is raising its quarterly dividend by 25% to 12.5 cents a share. The increase brings Ford’s forward dividend yield to over 3%. Shares were up 2% at midday.

Foreign Markets
European shares lost ground today after the central bank actions. In late trading, the FTSE 100 was off 0.5% while the Paris CAC and Germany’s DAX were each down 0.8%.

Asian markets were also in the red. The Shanghai Composite, Hang Seng and Nikkei 225 were down 0.8%, 0.9% and 1.5% respectively.

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