Markets opened lower on Thursday after jobless rates crept up to a four-month high for the week ending on January 10. The Labor Department said that the number of people filing for unemployment claims increased 19,000 to a total of 316,000. The new data surpassed the 291,000 that economists’ were projecting. The previous week’s information was upwardly revised to show 3,000 more claims than originally posted. The more stable data, the four-week moving average, was up by 6,750 to 298,000. This number takes the large weekly swings out of the equation. Over the past four and a half months the jobless rate has remained below the 300,000 level, which is tied to a strengthening labor market. Brian Jones, a senior U.S. economist at Societe Generale, said, “It happens at the beginning of every calendar quarter and the beginning of every year, so it’s difficult to seasonally adjust at this time. People are finding work. The labor market is fine.”
Shares of Citigroup Inc. (C) were trading lower after the company reported a drop in profits in their fourth-quarter results. The company largely attributed the lower numbers to a charge of $3.5 billion to settle legal claims and restructuring charges. Net income dropped to $346 million, or 6 cents per share. Last year at this time the company posted net income of $2.60 billion, or 82 cents per share. Analysts were predicting profits of 9-cents per share on $18.5 billion in revenue. CEO, Michael Corbat, said, “While overall results for 2014 fell short of our expectations, we did make significant progress on our top priorities. During the year, we increased our market share among our target institutional clients, grew our core loan book, and improved both our net interest revenue and margin from 2013 levels.”
Shares of Bank of America Corporation (BAC) were trading down nearly 3% after the banking giant reported a 14% decline in quarterly profits. The largest drop in data for the company was in bond trading revenue, which plummeted 21% to $1.5 billion. Profit fell to $3.05 billion, or 25 cents per share. This is down from the $3.44 billion, or 29 cents per share this time last year. Analysts were projecting 31 cents per share. Revenue dropped 13% to $18.73 billion. This also fell below analysts expectations of $20.94 billion.
That’s all for today,
Warren Gates, Normandy Research