Market Snapshot June 24, 2009, 4:45PM EST

Stocks Finish Mixed as Fed Holds Steady

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In economic news Wednesday, the Organisation for Economic Co-operation and Development raised its forecast for the economy of its 30 member nations for the first time in two years as the U.S. slump shows signs of easing. The combined economy of the world's most-industrialized countries will shrink 4.1% this year and grow 0.7% in 2010, the Paris-based group said. The new projections compare with March forecasts for contractions of 4.3% and 0.1%, according to a Bloomberg News dispatch. The improved outlook conflicts with that of the World Bank, which this week said the global recession will be deeper than it predicted three months ago. In anticipating a weak recovery staggered across different economies, the OECD signaled that the Federal Reserve and Bank of Japan should not raise interest rates before 2011 and recommended the European Central Bank cut its benchmark further.

U.S. new home sales dipped 0.6% to a 0.342 million unit annual rate in May, from a downwardly revised 0.344 million unit pace in April (from 0.352 million). March's 0.351 million rate was revised lower to 0.335 million. The data are disappointing, notes Action Economics.

All of the weakness was registered in the South, with gains seen in the other three regions. The months' supply of homes fell to 10.2 from 10.4 (revised from 10.1). Homes on the market fell to 292,000 from 299,000 (revised from 297,000). The median home price rose 4.2% to $221,600 from $212,600 (revised from $209,700). Prices are still down 3.4% year-over-year, but that's much better than the double digit declines seen so far this year, notes Action Economics.

U.S. durable goods orders rose 1.8% in May following a revised 1.8% increase in April (was 1.7% previously). Transportation orders rose 3.6%, with orders excluding transportation up 1.1%. Nondefense capital goods orders excluding aircraft climbed 4.8% after a -2.9% print in April (was -1.5%). Shipments declined 2.1%, howver, after a 0.5% decline in April (revised from -0.4%). Inventories declined 0.8%. The inventory-shipment ratio rose to 1.90 from 1.88 in April.

The Mortgage Bankers Association said mortgage applications filed in the week ended June 19 increased a seasonally adjusted 6.6% from the previous week. Applications rose an unadjusted 17.2%. The MBA said last week's applications to refinance existing home loans rose 5.9% from the week before, while filings for mortgages to buy homes increased a seasonally adjusted 7.3%. The four-week moving average tracking all mortgages fell 9.3%, reflecting recent weakness in refinancing activity.

Among companies in the news Wednesday, Oracle reported non-GAAP fourth-quarter earnings per share (EPS) of $0.46, vs. $0.47 one year earlier, on a 5.5% revenue drop (non-GAAP). Wall Street was looking for current-quarter EPS of $0.44.

Darden Restaurants (DRI) reported fourth-quarter EPS from continuing operations of $0.87, vs. $0.72 one year earlier, on 1.4% lower same-restaurant sales and 8.2% higher total sales. The company posted fourth-quarter EPS excluding items of $0.90; Wall Street was looking for $0.86. The company assumes that the economic and industry weakness it has experienced over the past six months will continue through all of fiscal 2010. Darden expects that blended same-restaurant sales for its three large casual dining brands -- Olive Garden, Red Lobster, and LongHorn Steakhouse -- will be between -2% and flat in fiscal 2010; it sees $2.59-$2.85 EPS.

Jabil Circuit (JBL) posted third-quarter core EPS of $0.04, vs. $0.26 one year earlier, on a 16% revenue decline. Jabil posted a $0.14 loss per share under GAAP; Wall Street was looking for a loss of $0.03. Jabil said that with continued end-market stabilization, it expects its net revenue for the fourth quarter to be consistent with the third quarter, in a range from $2.5 billion-$2.7 billion; it sees core EPS of $0.02-$0.12. However, the company remains cautious regarding the overall economy and its possible impact on Jabil's performance.