Week in Review: Stocks, economic indicators mostly positive to ring in New Year

Global economic news

U.S. construction spending up slightly in November
The United States spent $810.23 billion on construction projects in November, up from $806.69 billion in October and $791.46 billion in August, a 10-year low. Private-sector construction spending appears to be recovering more quickly than public-sector spending, which will most likely continue to be negatively impacted by tight state and local budgets throughout 2011.


Pace of U.S. private-sector hiring picks up; unemployment rate drops
Payroll firm Automatic Data Processing reported that American companies added 297,000 jobs in December. The increase in private-sector hiring, the largest in ADP's 10-year history, could be an encouraging sign for the jobs market and overall health of the U.S. economy. The ADP report was so positive that it led analysts to raise their predictions for this week's U.S. Department of Labor jobs report, which also includes federal, state, and local government employment. The Labor Department's report tallied just 103,000 jobs added in December, somewhat disappointing given the earlier ADP estimates. Still, the nation's unemployment rate fell to 9.4%, the lowest level since May 2009.


Initial jobless claims back above 400,000 in latest week
The number of Americans filing initial unemployment claims rose 18,000 to 409,000 in the week ended January 1. While the increase follows a drop below 400,000 new claims the previous week, most analysts cautioned about reading too much into the increase because federal holidays during both weeks, weather issues, and other seasonal factors may have resulted in a distortion of data.


Northeast blizzard dampens strong U.S. retail sales projections
A blizzard that disrupted post-holiday shopping throughout the Northeast was partially blamed for many U.S. retailers falling short of analysts' December sales projections. According to sales tracker Thomson Reuters, 55% of the 11 chains that had reported December numbers missed their estimates. According to Retail Metrics Inc., Target, the second-largest U.S. discount chain, reported a sales increase of 0.9%, below the 3.9% average increase indicated by estimates, while sales at stores open more than a year at Gap dropped 3%, compared with the 2.4% average increase projected. Still, the holiday season ended with the strongest retail revenue growth since 2006.


Services in U.S. expand at fastest pace in nearly five years
The Institute for Supply Management's non-manufacturing index rose to 55.7 in December from 55 in November, indicating that service industries in the United States grew at the fastest pace since May 2006.


Greek Prime Minister confident his country can repay bailout funds "in full"
During a speech Thursday at the Economy Ministry in Paris, Greece's Prime Minister George Papandreou assured colleagues that his country will be able to repay private holders of its bonds. Some of the reasons for Papandreou's confidence include debt reduction programs and structural reforms being established by Greece, and financial support received from the European Union and the International Monetary Fund.


Eurozone inflation moves above ECB's target level
According to the European Union's statistics office, the annual rate of inflation across the eurozone was 2.2% in December, up from a 1.9% pace in November. This is the first time in more than two years that the pace of inflation has surpassed the European Central Bank's target level. The ECB's mandate is to keep the rate of inflation below 2% over the medium term.


German manufacturing orders rise sharply
German manufacturing orders rose a seasonally adjusted 5.2% in November, easily exceeding the 1% increase projected by analysts. The surge in orders was largely the result of an 8.2% increase in foreign orders from customers outside the eurozone.


Singapore economy rebounds in fourth quarter
Singapore's trade-dependent economy, considered a bellwether for Southeast Asia, grew 6.9% in the fourth quarter. The growth rate fell below analysts' projections but was a significant turnaround from an 18.9% contraction in the country's economy in the third quarter. For all of 2010, the island nation's gross domestic product expanded 14.7%, the fastest pace of growth in Singapore's 45-year history.


Global food prices surge to record high
The United Nations Food and Agriculture Organization's monthly food price index, a leading measure of international food prices, jumped 4.3% last month. December's reading, 214.7, is a record high for the FAO's index, according to data going as far back as 1990. November's reading was 206. The previous record of 213.5 was reached in June 2008, when rising food prices resulted in widespread violence in many developing countries.

Global corporate news

Qualcomm confirms plans to purchase Atheros
Just as the battle among chip makers is becoming increasingly competitive, semiconductor maker Qualcomm announced that it is spending $3.1 billion to purchase Atheros Communications, a fast-growing Silicon Valley company that specializes in making chips used in wireless devices. The two companies, who have been partners for years, expect the all-cash deal to close in the first half of 2011 and modestly add to Qualcomm's earnings in fiscal 2012.


Family Dollar reports profit, traffic increase
Family Dollar Stores fiscal first-quarter earnings increased 9.9% as the discount retailer continued to see increased customer traffic and sales. For the quarter ended November 27, the company reported a profit of $74.3 million, up from $67.6 million a year earlier.


Monsanto posts profit on growth in seed unit
For its fiscal first-quarter ended November 30, Monsanto recorded a profit of $6 million, compared with a prior-year loss of $19 million. The agricultural giant cited sales growth of 13% in its seed and genomics business as a reason for its turnaround from last year's results.

The week ahead

• Alcoa earnings released Monday, January 10
• France's industrial production figures released, Monday, January 10
• Australia's Labour Force Survey results released Wednesday, January 12
• U.S. initial jobless claims figures released Wednesday, January 12
• Intel earnings released Thursday, January 13
• Italy's CPI released Friday, January 14
• JPMorgan Chase earnings released Friday, January 14
• China's Producer and Import Price Index released Friday, January 14 

Stay focused and diversified
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Sources: MFS research; The Wall Street Journal; The Wall Street Journal Online; Bloomberg News; Financial Times; Forbes.com; CNNMoney.com; msnbc.com

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