Reports » US

US stock market daily report (January 10, 2013, Thursday)

Contributed by Millennium Traders

Late Wednesday, BATS Global Markets Inc. - 'BATS', the 3rd largest stock exchange in the USA - issued an alert to investors that computers for two equity exchanges and an options platform allowed trades over a period of more than four years to take place at prices that violate Securities and Exchange Commission regulations seeking to ensure that investors receive the best price. The issue exists in relatively rare situations per BATS and, the total dollar impact to customers over the four year time frame was $420,361. Such computer glitches are an example of technological problems that damage confidence and raise concerns about the effectiveness, of U.S. market regulators.

The U.S. Labor Department said Thursday that new applications for U.S. unemployment benefits rose by 4,000 to a seasonally adjusted 371,000 in the week ended January 5, striking the highest rate in one month. From an original reading of 372,000 for initial claims from two weeks ago were revised down to 367,000. Over the past month, average of new claims climbed by 6,750 to 365,750. Continuing claims sank by 127,000 to a seasonally adjusted 3.1 million in the week ended December 29, per labor department.

The U.S. Labor Department reported Thursday that job openings at U.S. workplaces ticked up to 3.68 million in November from 3.67 million in October. Compared with 2011, job openings rose 12%, private openings increased 14% to 3.32 million and government openings rose 2% to 355,000. Separations, such as quits and layoffs, fell to 4.14 million in November from 4.09 million during October.

The Consumer Financial Protection Bureau announced Thursday that new mortgage rules will change how lenders decide if borrowers qualify for adjustable-rate mortgages, rules intended to keep lenders from getting borrowers into mortgages they can not afford. Effective January 2014 the “ability to repay” rule requires lenders to consider more than just the loan’s initial interest rate in determining whether someone can afford the loan. Instead of using the introductory rate in lenders calculations, they will be required to consider the loan’s “fully-indexed rate” - although not the highest rate an ARM borrower can incur - to makes sure the lender has the ability to make the monthly payment, at that rate. For borrowers the new rule could make it harder to qualify for ARMs at a higher rate. Ignoring the highest rate is a concern.

The U.S. Commerce Department said Thursday that inventories at U.S. wholesalers rose 0.6% in November to a seasonally adjusted $498.9 billion with sales for wholesalers rising 2.3% to $419.3 billion. The ratio of inventories relative to sales -a number that measures how many months it would take for a company to sell off its current inventory - remained unchanged at 1.19. The increase in inventories during October was revised down to 0.3% from 0.6%. Over the past 12 months, inventories rose 7.0%.

The U.S. Central Bank said Thursday that the Federal Reserve will send $88.9 billion to the Treasury after earning a record $91 billion during 2012. From the interest income on the securities acquired through its quantitative easing programs, the Federal Reserve made $80.5 billion. During 2010, the Fed sent $79.3 billion to the U.S. Treasury. During 2011 the Fed sent $75.4 billion to the U.S. Treasury.

ECB President Mario Draghi told reporters at his monthly news conference on Thursday that the European Central Bank policy makers voted unanimously to leave interest rates unchanged, amid signs of healing financial strains in the euro zone and no change in the institution's outlook on price stability. Draghi said there was "no reason to change the decision taken last month." While "fragmentation" of euro-zone financial markets is healing, significant signs of strain still remain, Draghi said, noting that improvements haven't yet fed through to the real economy.