Market Snapshot July 16, 2009, 3:30PM EST

Stocks Trade Higher

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In economic news Thursday, builder confidence in the market for newly built, single-family homes notched up two points in July to its highest level since September 2008, according to the National Association of Home Builders/Wells Fargo Housing Market Index (HMI). The HMI rose two points to 17 in July as builders saw an improvement in current sales conditions but continued to express concerns about the future.

The Philadelphia Fed index slipped to -7.5 in July after climbing over 20 points to -2.2 in June. The index had risen for four straight months since hitting a cycle low at -41.3 in February. It was at -16.3 a year ago. The employment index dropped to -25.3 from -21.8 (-7.3 a year ago). But the new orders rose to -2.2 from -4.8 (-12.1 last year). Prices paid fell to -3.5 from -13.0 (75.6 last year), while prices received rose to -21.5 versus -16.6 (28.8 last year). The 6-month outlook saw the general business activity index fall to 51.9 from 60.1 in June (18.0 a year ago), while the capital expenditures index rose to 2.4 from 1.7 (9.2 last year).

First-time U.S. jobless claims fell another 47,000 to 522,000 in the week ended July 11. Action Economics says auto retooling distortions, exacerbated by the bankruptcy of General Motors Corp. and Chrysler this spring, as well as the July 4 holiday, have made for significant distortions in the claims data. Continuing claims plunged a record 642,000 to 6,273,000 after climbing 191,000 to a revised 6,915,000 in the week of July 4 (was 6,883,000).

Thge Treasury Dept. reported that foreigners sold another $66.6 billion in net U.S. assets in May, after selling a revised $38.0 billion in April (was $53.2 billion).

China's second-quarter GDP growth accelerated to +7.9% year-after-year, after its 6.1% rise in the first quarter was the slowest in quarterly data back to 1992. It was slightly better than median projection for +7.8%, after the consensus outlook had creeping up over the past several weeks on continued encouraging data and statements from Chinese officials increasingly optimistic about attaining target annual growth of 8.0% in 2009.

A split among Federal Reserve officials widened last month: Depending on who is doing the forecasting, economic growth will either remain stalled next year or will accelerate to the fastest rate since 1999. Minutes from the Fed's June meeting show central bankers are less certain than they were in April over how the economy will emerge from the worst recession in a half century. Policy makers have differing assessments of how quickly credit markets will heal, and how effective a $787 billion fiscal stimulus and $1 trillion expansion of the Fed's balance sheet will be, according to the FOMC's minutes released yesterday.

In earnings news Thursday, Marriott International (MAR) reported second-quarter EPS from continuing operations of $0.10, vs. $0.41, on flat total revenues. The company reported adjusted second-quarter EPS of $0.23.

Baxter International (BAX) posted second-quarter EPS of $0.96, vs. $0.85, on a 7% rise in U.S. sales and a 9% rise in international sales (excluding foreign currency translation).

Harley-Davidson (HOG) reported second-quarter EPS of $0.08, vs. $0.95, on a 27% revenue drop. The company cut its 264,000-273,000 2009 motorcycle shipment forecast to 212,000-228,000, or 25%-30% fewer than 2008. Harley will implement further reduction this year of about 700 positions in its hourly production workforce; it will also reduce non-production, primarily salaried headcount by about 300 additional positions.

East West Bancorp Inc. (EWBC) posted a second-quarter loss per share of $1.83, vs. a $0.41 loss, on 13% lower interest and dividend income. The current-quarter loss includes a $151.4 million provision for loan losses and $37.4 million other than temporary impairment on investment securities.