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Midday Market Update

Stocks Higher After Earnings, Upbeat Data

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U.S. Market
Stocks were higher this morning after encouraging economic data and big bank earnings.

Initial unemployment claims dropped 37,000 last week to 335,000, a five-year low. Economists had expected claims to come in at 370,000. The less volatile four-week moving average fell by 6.750 claims to 359,250 in the week.

Housings starts rose 12.1% in December from November levels, well above the 3.4% increase expected by economists.  Starts were up 36.9% from December 2011 levels.  Single-family home starts were up 8.1% and activity picked up across all regions of the country.

At midday the Dow, S&P 500 and Nasdaq were each up 0.5%.

Stocks on the Move
Shares of  Bank of America (BAC) fell over 3.5% after the firm announced fourth-quarter earnings. The bank’s profit fell 63% mainly due to charges related to an $11.6 billion mortgage settlement and other legacy issues. Credit-loss provisions and net charge-off rate fell from the year-ago quarter. 

 Citigroup (C) reported a 25% rise in fourth-quarter profit today.  The firm was hit by a number of legal charges related to mortgage foreclosures.  Operating expenses were flat from the year-ago quarter. Shares were down 3% on the report.

 eBay (EBAY) released  upbeat fourth-quarter earnings last night, highlighted by accelerating user and volume growth across the marketplace and payment business segments, impressive mobile commerce merchandise and payment volume, an expanded offline payment processing footprint for PayPal, and new local commerce initiatives. Management's initial 2013 guidance ($16.0 billion-$16.5 billion in revenue, adjusted earnings per share of $2.70-$2.75, capital expenditures of 8%-10% of revenue) was consistent with our expectations. Shares were up 2.8% at midday

Foreign Markets
European markets moved higher after U.S. economic data. In late trading, the FTSE 100, Germany’s DAX and Paris CAC were up 0.4%, 0.5% and 1.0% respectively.

Asian shares were mixed on the day. The Shanghai Composite was down 1.1%, the Hang Seng was off 0.1% while the Nikkei 225 was up 0.1%.

Jeremy Glaser does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.