Initial Jobless Claims Sink Stocks


Over the last few days, the stock markets have been a veritable rollercoaster. Last Friday, the Dow Jones Industrial Average closed up by almost 150 points. On Monday, it fell roughly 130 points. On Tuesday, it ascended 100 points. Today, while the movement isn't quite as dramatic, the blue-chip index is down a non-negligible 45 points, or 0.32%, with about an hour left in the trading session.

Jobless claims disappoint, and Apple comes under fire
A report released this morning estimated that the number of U.S. workers filing for jobless benefits fell last week but nevertheless came up short of expectations. According to the Department of Labor, applications for first-time unemployment benefits decreased by 5,000 to a seasonally adjusted 366,000 in the week ended Feb. 2. Although this was higher than the consensus forecast of 360,000, the four-week moving average -- which smooths out weekly volatility -- fell to its lowest level since March of 2008.

In corporate news, hedge fund manager David Einhorn is appealing to the shareholders of Apple to vote against a proposal to eliminate preferred stock from the tech giant's corporate charter. Einhorn has been a vocal critic of Apple's accumulating pile of cash, arguing that the company should begin returning more capital to shareholders. Speaking on CNBC today, Einhorn said: "We think for every $50 billion of preferred that they issue it will unlock about $32 a share in Apple. If Apple used about half of their earnings toward this program, we think they would be able to issue approximately $500 billion, which would unlock about $320 a share."

Also in the news, it's rumored that American Airlines and US Airways are hashing out the last-minute details of a merger between the two companies. While people close to the deal are warning that it could still fall apart, many see the union as a foregone conclusion. Once united, the company will have a $10 billion market capitalization, making it the largest domestic airline by traffic. According to an airline industry consultant, the combination will "result in four healthy airlines with the right level of capacity."

Finally, among Dow stocks, American Express is the best-performing component, up 2.7%. According to my colleague Dan Dzombak, in a presentation yesterday, CEO Kenneth Chenault "disclosed previously nonpublic information on the company's international results for 2012, which showed that total revenue net of interest expense for the company's international business operations rose 2% year over year from $9.3 billion to $9.5 billion." The news was a relief to investors who were still smarting from the credit card company's disappointing fourth-quarter results.

Alternatively, shares of personal-computer maker Hewlett-Packard are down 1.9% at the time of writing, making it the worst-performing stock on the blue-chip index. Earlier this week, rumors that the company would be broken up sent its shares 2.7% higher in Tuesday's trading session. As fellow Fool Matt Thalman pointed out, however, the rumors are most likely just that -- rumors. Consequently, when the market came to terms with this today, HP's shares fell.

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John Maxfield owns shares of Apple. The Motley Fool recommends American Express and Apple. The Motley Fool owns shares of Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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