A correction has taken hold on the Nikkei. The Tokyo exchange tanked today, shedding more than 5%. Add in the losses over the prior four trading days, and it's fallen more than 14%. Keep in mind it was just one week ago, the index hit a 5 1/2 year high. Before this recent reversal, the Nikkei had skyrocketed 84% higher since November and was up a whopping 16% for the month. The reversal in the rally coincides with a jump in Japanese government bond yields as the country's central bank tries to spur inflation.
GDP has been revised downward. The Commerce Department's second estimate of Q1 growth comes in at an annual rate of 2.4%. The original estimate was for 2.5%. Also this morning, The Labor Department released weekly jobless claims. It says they climbed to a seasonally adjusted 354,000. That's a rise of 10,000 from the prior week.
Due out at 10am, new numbers on pending home sales. They'll come on the heels of a report that finds a steep fall in foreclosures. The number crunching was done by RealtyTrac which says the volume of foreclosures in the first quarter of 2013 was down 18% from the last quarter of 2012. Foreclosed homes accounted for 21% of sales, down from 25% in the prior quarter. They're now also less than half of where they peaked at 45% back in the beginning of 2009. The study lists a number of reasons for the fall. They include rising home prices, tighter inventory and low mortgage rates. By the way President Obama will announce today the extension of a program to help some homeowners get loan modifications.
There are a number of deals in the works to tell you about this morning. First off, Bloomberg reports that Fiat is trying to buy the part of Chrysler it doesn't already own and has begun raising $10-billion for the effort. Next, Berkshire Hathaway's (BRK-B) production unit is buying Las Vegas based NV Energy (NVE) for $5.6-billion. And finally, Dish Network (DISH) has raised its bid for Clearwire (CLWR) to $4.40 a share That tops an offer from Sprint (S) by almost 30%. Of course Dish is also trying to buy Sprint.
Google (GOOG) is looking beyond its glasses in the hardware market. The company has announced it will make a new smartphone under its Motorola brand. The device will be called the Moto-X. It will be built in Texas. Production is set to start this summer.
First up is Costco (COST) which just reported quarterly results this morning. The big box club beat earnings estimates by a penny posting $1.04 per share. It missed slightly on revenue, but there's not much to complain about here. Profit was actually up 19% from a year ago. The jump came from an increase in membership fees. The company has been raising those fees while lowering prices up and down its enormous aisles. Looking at a chart, Costco stock is up 31% over the past year and set a new 52-week high on Tuesday.
Also out with earnings this morning is discounter Big Lots (BIG). The numbers were right in line with estimates. The company says it made 61-cents a share excluding items on $1.3-billion in revenues. The Ohio-based chain began a push into Canada in recent months. It also opened 14-new stores in the U.S. Big Lots is up 36% year-to-date, though when you look at the last 52-weeks, it's risen only about 3%.
Now we look at Avago Technologies (AVGO), a semiconductor company based in Singapore. It has been up more than 4% in early trading. The company posted earnings of 61-cents a share after yesterday's closing bell when estimates had been for 52-cents. Avago also beat on revenues and says it expects growth between 6% and 9%. Shares of the company have not been moving in tandem with the market at all, and prior to this morning were up 6% for the year.
Finally, word about to get 'round for Krispy Kreme Doughnuts (KKD). The former Wall Street darling reports earnings this afternoon. Analysts are expecting the company to post 17-cents a share on almost $116-million in revenue which would be a significant improvement over last year. The company currently has a market cap under $1-billion, but still makes a lot of dough with about 750-locations in 22-countries, not to mention its product placement in 10,000 other stores. The stock is currently trading at less than 1/3 of its all-time high set back in the summer of 2003. But recently management seems to have found a "hole-y grail" with the stock up 39% this year.