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Midday Market Update

Stocks Mostly Lower After Earnings, Data

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U.S. Market
Stocks were mostly lower this morning after a slew of economic data releases and earnings reports.

Initial jobless claims rose 38,000 last week to 368,000. Economists had expected 365,000 claims in the week. The less volatile four-week moving average rose 250 to 352,000, close to a four-year low. Separately, Challenger Gray & Christmas said that planned job cuts rose 24% in January from December levels. Despite the increase, the 40,430 planned cuts are 24% lower than January 2012 levels. 

Personal income rose a higher-than-expected 2.6% in January as a slew of special and accelerated dividend payouts pushed dividend income higher. Consumer spending only rose 0.2% in the month as the savings rate jumped to 6.5%, the highest level since 2009.

The Chicago purchasing managers index rose to 55.6%, the highest level in nine months. Economists had expected a more modest increase to 49.8%. A reading over 50% indicated an expansion in the manufacturing sector.

At midday Nasdaq, Dow and S&P 500 were down 0.1%, 0.2% and 0.3% respectively.

Stocks on the Move
 Viacom's (VIAB) fiscal first-quarter results were weak but about  on par with expectations, given the well-documented rating weakness at Nickelodeon. Media networks revenue decreased 2% to $2.4 billion, driven by lower advertising revenue, partially offset by increased affiliate revenue. Domestic and worldwide advertising revenue both fell 6%. Adjusted cable network operating margins declined 310 basis points to 43.0%. Shares rose 1.6% on the news.

Shares of  Dow Chemical (DOW) fell over 5% after the firm reported  worse-than-expected fourth-quarter and full-year results. Fourth-quarter sales dropped 1% compared with the prior-year period; pricing contributed the 1% decline as volume was flat year over year. Dow's operating rate in the quarter was 78%, compared with 72% in the fourth quarter of 2011 and 83% in the third quarter of 2012.

 WMS Industries (WMS) announced today that its board has  approved an acquisition bid from Scientific Games (SGMS) for $26.00 per share. This represents an approximate 60% premium to the January 30 trading close price of $16.37 and 8.4 times WMS' fiscal 2012 EBITDA. WMS and Scientific Games reported the deal is anticipated to close by the end of the year. WMS shares soared over 50% on the news.

 Facebook (FB) posted results late Wednesday with revenue and earnings generally  in line with our expectations. Total revenue for the quarter reached $1.5 billion, with $1.3 billion from advertising sales. Advertising revenue grew 41% versus 2011, easily outpacing the online advertising market as Facebook continues to steal share from lesser rivals. Shares were  2.8% lower at midday.

Foreign Markets
European markets were lower today. In late trading, Germany’s DAXFTSE 100 and Paris CAC were down 0.2%, 0.3% and 0.4% respectively.

European markets were lower today. In late trading, Germany’s ,  and  were down 0.2%, 0.3% and 0.4% respectively.

Asian shares were mixed. The Shanghai Composite was up 0.1%, the Nikkei 225 gained 0.2% while the Hang Seng fell 0.4% on the day.

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