Sector Snap: Teen stores report split November

Teen clothing stores divided into winners and losers in November, with Abercrombie & Fitch the clear winner of the bunch and Aeropostale Inc. knocked down a few pegs.
Revenue in stores open at least one year at teen stores rose 9 percent overall during the month that kicks off the holiday season, better than the 3.3 percent analysts polled by Thomson Reuters were expecting. But that was in large part due to strong results at Abercrombie and a few other teen clothing chains.
The measure is considered a key indicator of a retailer's financial health because it excludes stores that open or close during the year.
Abercrombie & Fitch Co., based in New Albany, Ohio, reported the revenue figure rose 22 percent, more than three times higher than what analysts expected. Its surf-themed Hollister chain was particularly strong. After suffering early in the recession as teens abandoned the chain and its relatively high prices for cheaper competitors, the chain has cut its prices significantly and seen results improve markedly.
Its shares rose $5.52, or 10.9 percent, to $55.96 during midday trading. Earlier shares traded at a 52-week high of $56.06.
Stifel Nicolaus analyst Richard Jaffe said the strong results were likely driven by lower prices but he expects the strong results to moderate in December.
Meanwhile, Aeropostale Inc. had the opposite fate. The New York chain was one of the better performing teen stores during the recession, as its focus on low prices helped it gain market share from higher-priced competitors. But as Abercrombie and other teen retailers cut their own prices and became more competitive during the recession, Aeropostale has found it tough to hold its ground.
Late Wednesday, Aeropostale said its third-quarter net income fell 6 percent, below expectations, offered a weak fourth-quarter forecast and said its co-chief executive was leaving, sending shares down 13 percent in midday trading. Shares fell $3.40 to $23.40. The stock has traded between $19.10 and $32.24 during the past 52 weeks.
Janney Capital Markets analyst Adrienne Tennant said in a note to investors that during the busy shopping day on the Friday after Thanksgiving, known as Black Friday, there was "an incredibly promotional teen atmosphere."
Steep price cuts at Abercrombie and its sibling chain Hollister, as well as at American Eagle and Gap, served to take back share from Aeropostale, she said.
Elsewhere in the sector, winners included The Buckle Inc. The Kearny, Neb.-based chain's revenue in stores open at least one year rose 7.9 percent, ahead of analyst expectations. Shares rose $2.19, or 6.1 percent, to $38.32. The stock has traded between $23 and $40.35 during the past 52 weeks.
Wet Seal Inc., based in Foothill Ranch, Calif., reported revenue in stores open at least one year rose 7 percent, while analysts expected an 0.8 percent rise. Shares rose 20 cents, 6.2 percent, to $3.45.
On the other end of the spectrum, American Eagle Outfitters Inc., based in Pittsburgh, missed expectations and shares fell $1.02, or 6.1 percent, to $15.82.

Cyber attack forces Wikileaks to change web address

Whistle-blowing website Wikileaks has been forced to change its web address after the company providing its domain name cut off service.

EveryDNS.net said it had terminated services because Wikileaks.org had come under massive cyber attacks.
But Wikileaks has already reappeared using a Swiss web address.
Wikileaks has also used micro-blogging site Twitter to urge its fans to redistribute its "raw" net address so it can be viewed at any time.
This numerical internet protocol (IP) address remains live and accessible even when web domains - the normal "www" addresses used to access most sites - are unavailable.
Experts say it is likely that Wikileaks has done deals with lots of web hosting companies, although many are likely to back away from dealing with the controversial site in the light of recent web attacks.
There is also a published list of mirror sites, which Wikileaks hopes will provide constant access to the site.
Some of these sites have simply copied Wikileaks' content and put it on a different web server, while others are using different domain names to point at the original content.
The more of these sites there are, the more difficult it will be to shut Wikileaks down, security analyst Paul Mutton told the BBC.
Downtime
In a post on Twitter, Wikileaks acknowledged that its domain had been "killed" by EveryDNS.net.
It was not clear how long disruption to the wikileaks.org site would last.
In a statement on its website, EveryDNS.net said it had issued a 24-hour termination notice to Wikileaks which ended at 0300 GMT on 2 December.

'ALIEN' LIFE FOUND in California

Once the internets noticed NASA had scheduled a press conference on astrobiology later today, they wasted no time in speculating what the announcement could be.
NASA said the press conference would discuss a "finding that will impact the search for evidence of extraterrestrial life". Enough grist for any conspiraloons fed up with Wikileaks stories to predict imminent news of alien life.

In fact NASA's findings are a little closer to home. The space boffins have found a bacterium living in an arsenic lake near California's Yosemite National Park.

The finding is important because the bacterium uses arsenic in place of phosphorus - an element previously considered vital for all forms of life.
If there can be life without phosphorus then there are thousands more planets which could sustain life of some sort.
The news was covered by an embargo - dubious agreements under which reporters are given information on the understanding that they will not publish it until an agreed time - but The Sun incontinently spaffed most of the details on Wednesday.
The official announcement from NASA is due later today, stay tuned...

Nielsen: Men want Android devices, women favor iPhone

Smartphones running Apple's (NASDAQ:AAPL) iOS and Google's (NASDAQ:GOOG) Android are the most desired among U.S. consumers likely to upgrade their current mobile handset according to a new survey published by The Nielsen Company--while women planning to upgrade lean toward the iPhone, men are targeting Android devices. Smartphones presently make up 29.7 percent of the U.S. mobile device market, Nielsen reports--iOS leads with 27.9 percent of the market, followed by Research In Motion's (NASDAQ:RIMM) BlackBerry at 27.4 percent and Android at 22.7 percent. Among all U.S. smartphone users planning to upgrade their current phone, iOS is the likely destination for 35 percent of respondents, with Android at 28 percent and BlackBerry at 15 percent--however, among feature phone owners looking to upgrade, Android is targeted by 28 percent, edging past iOS at 25 percent and well ahead of BlackBerry at 11 percent.
Among female respondents, 30.9 percent are planning to purchase an iPhone--22.8 percent want an Android smartphone, followed by BlackBerry at 12.5 percent. In addition, 23.8 percent of women say they haven't yet decided which platform they'll select. As for men, 32.6 percent plan to go Android, with iOS at 28.6 percent and BlackBerry at 12.8 percent--14.9 percent of males are still weighing their options.
iOS remains the smartphone platform of choice among younger subscribers, with 35.9 percent of respondents ages 18 to 24 desiring the iPhone, compared to 32.0 percent favoring Android; the gap narrows among users 25 to 34, with 31.9 percent citing iOS and 29.8 percent targeting Android. Among respondents ages 35 to 54, Android is favored by 27.4 percent, with iOS at 26.3 percent.
Most smartphone owners exhibit little loyalty to their current mobile operating system, with just 25 percent of consumers planning to stick with their current platform when they next upgrade their phone, according to a global survey published earlier this week by market research firm GfK. iOS fared best, with 59 percent of respondents planning to remain loyal, followed in descending order by BlackBerry (35 percent), Android (28 percent), Symbian (24 percent) and Microsoft's (NASDAQ:MSFT) Windows Phone (21 percent).


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Verizon's 4G Network: The Details

Verizon has officially announced roll-out plans for its 4G LTE wireless data network.

By Harry McCracken, Technologizer Dec 2, 2010 3:00 pm

Verizon Wireless officially announced the roll-out plans for its 4G LTE high-speed wireless data network today, and none too soon: The LTE era starts this Sunday in thirty-eight metro areas. All Things Digital's Ina Fried has more specifics, and Greg Kumparak of MobileCrunch lists the launch cities.
The facts that caught my eye:

• Verizon is charging $50 a month for 5GB of data, and $80 for 10GB; as a current customer of its 3G data service, that strikes me as a decent deal, since I'm paying $60 for 5GB of pokier 3G service.
• Two USB modems will be available, for $99 each on contract after rebates; they'll double as 3G modems when 4G service isn't around.
• It sounds like 4G phones won't show up until mid-2011 (there goes any last remaining possibility of a 4G Verizon iPhone in early 2011).

What I really want is a 4G MiFi mobile router that I can use with a laptop, an iPad, a smartphone, and any other Wi-Fi device; I assume that one is in the works. Hope that it arrives before too long-and that there's a way for me to upgrade from my 3G MiFi without spending a fortune.

Grocer Kroger rings up 3Q profit

CINCINNATI (AP) — Kroger Co. rang up better sales and returned to third-quarter profitability, as a focus on building customer loyalty in a rough economy paid off for the nation's largest traditional grocery chain.
The Cincinnati-based grocer reported Thursday that net income was $202.2 million, or 32 cents a share, on revenue of $18.7 billion, a 5.9 percent increase over sales a year ago.
Analysts expected earnings of 32 cents a share and revenue of $18.5 billion for the quarter that ended Nov. 6.
In last year's third quarter, Kroger reported a loss of $875 million, or $1.35 a share, including a charge of $1.05 billion reflecting the declining value of its Ralphs division in recession-pounded California. Without that charge, Kroger would have earned $176.7 million, or 27 cents a share. This year's quarterly net income was 14 percent higher than that adjusted figure.
Kroger shares tumbled in premarket trading from the 52-week high of $24.14 where they closed Wednesday. Shares fell $2.21, or 9 percent, early Thursday and have traded as low as $19.08 the past year.
Kroger operates 2,461 grocery stores in 31 states under some two dozen local banner including Ralphs, Fred Meyer, Food 4 Less, King Soopers, Dillons, Smith's and Fry's.
The company narrowed its full-year guidance, dropping the high end and raising the low — to a range of $1.65 to $1.78 per share from $1.60 to $1.80 per share. Analysts surveyed by Thomson Reuters expect, on average, that the company will earn $1.78 per share for the year on sales of $81.35 billion.
The company also tightened its forecast for annual revenue from stores open at least 15 months, a key retail gauge because it excludes stores that open or close during the period. The forecast went a 2 percent to 3 percent projected rise to 2.5 percent to 3 percent.
For the third quarter, Kroger said sales at stores open at least 15 months rose 2.4 percent, excluding fuel sales. Last year, they were up 1.3 percent. Without fuel, sales rose 3.1 percent for the quarter.
Kroger says repeat customers are key to its long-term growth, and it has lured customers with expanded fuel rewards, promotions such as $5 rebates for buying certain items in "mega" sales, more online coupons and mailings of special coupons for items individual households frequently buy.
Discounting amid tough grocery competition continued to bite into Kroger margins, but the company said cost-cutting and productivity increases helped compensate.
"These results show Kroger's strategy is working and that our core grocery business is strong and resilient," David B. Dillon, Kroger's chairman and CEO, said in a statement.
Kroger is drawing customers with lower prices and a pleasant shopping experience, Dillon said

Europe banks used Fed to ease liquidity strains

Barclays (BARC.L), UBS (UBSN.VX), Royal Bank of Scotland (RBS.L), Dresdner Bank (CBKG.DE) and Dexia (DEXI.BR) were among the biggest users of the support, according to data released by the Federal Reserve late on Wednesday.
The data stoked some criticism in the United States at the scale of help provided to overseas firms following the bankruptcy of Lehman Brothers in September 2008.
Several European banks said the loans were available more cheaply than the market could provide and were paid back long before the facilities closed, but the data highlight how far they relied on the U.S. central bank during the crisis.
Barclays borrowed $47.9 billion under the Primary Dealer Credit Facility (PDCF), an overnight facility for broker-dealers, after its takeover of Lehman's U.S. operations.
Other sizeable users of PDCF included UBS and BNP Paribas (BNPP.PA).
The Fed facilities were used from the summer of 2007 to ease liquidity strains and provide credit. Adding up the raw data could overestimate how much banks needed, as loans were rolled over or repaid and subsequently borrowed again, bankers said.
Barclays was also a big user of the term auction facility (TAF), which aimed to provide funding for up to 84 days to financial firms and more commonly used by Europe's banks.
Barclays borrowed more than $200 billion during the course of the TAF facility and UK rivals RBS and Bank of Scotland, now part of Lloyds Banking Group (LLOY.L), tapped it for more than $150 billion.
France's Societe Generale (SOGN.PA) borrowed more than $100 billion from the facility, Dresdner tapped it for more than $90 billion, Dexia used more than $80 billion and UBS, Unicredit and Deutsche bank each tapped it for more than $50 billion.
The Fed said all users of the PDCF and TAF facilities had paid back the loans with interest.
Barclays said it paid back all the loans by the end of 2009.
RBS said: "Like most global banks, we utilized central bank liquidity schemes during the crisis in financial markets." RBS, which owns U.S. bank Citizens, had a 2.3 trillion pound balance sheet at the end of 2008 and has been shrinking since.
UBS said it had fully repaid the facility by June 2009. "We used them to diversify our funding sources, this was just one source of liquidity alongside others," the bank said.
BNP said it stopped using the facility in August 2009 and part of the reason it used TAF to "avoid exacerbating market strains further."
Japanese banks also borrowed from the Fed. U.S. banks including Citigroup (C.N), Morgan Stanley (MS.N) and Goldman Sachs (GS.N) were also big recipients of the Fed's key emergency lending programs, according to a Reuters analysis of Fed data.
(Reporting by Steve Slater; additional reporting by Martin Desapinto, Lionel Laurent and Philipp Halstrick. Editing by Jane Merriman)
LONDON (Reuters) - European banks said they used emergency help from the U.S. Federal Reserve to ease liquidity strains at the height of the financial crisis and have fully repaid loans, after data showed they were big beneficiaries.

Jobless claims rise, but trend shows improvement

WASHINGTON (AP) — More Americans applied for unemployment benefits last week, but the broader trend in layoffs points to a slowly healing job market. The average over the past month fell to a two-year low.
New claims for unemployment aid rose last week by a seasonally adjusted 26,000 to 436,000, the Labor Department said Thursday. The previous week's claims were revised up slightly to show applications had tumbled by 31,000 to 410,000. The figures are often volatile during the weeks around the Veteran's Day and Thanksgiving holidays.
Even so, the longer-term trend has shown a downward drift.
The four-week moving average of claims, which smooths volatility, fell to 431,000 last week. That's a two-year low.
"After being little changed for most of the year, new jobless claims have broken to the downside in the last several weeks, suggesting that labor markets may actually be improving," said Steven Wood, chief economist for Insight Economics.
Applications for jobless benefits need to stay below 425,000 for several weeks to signal robust hiring, economists say.
Claims peaked last year at 651,000 in March 2009. For most of this year, new claims largely fluctuated around 450,000. They have been below 450,000 in the last four weeks.
Recent signs suggest the economy is on track to end the year on a stronger note.
The latest evidence came Thursday with strong reports from retailers and on home sales:
— Stores reporting sales gains in November that topped Wall Street expectations included Costco Wholesale Corp., Target Corp., the owner of Victoria's Secret and teen retailer Abercrombie & Fitch. That's boosting hopes that shoppers will spend more during the holiday season.
— The National Association of Realtors said the number of people who signed contracts to buy homes jumped in October, marking the third gain since contract signings hit a low in June. The association's index of sales agreements for previously occupied homes rose 10.4 percent in October. Contract signings were up in every region of the country except the West.
And, earlier this week other economic reports showed that factories are pumping out goods, construction spending is up and auto sales are rising.
Some economists are starting to raise their forecasts for job creation based on these developments. The government releases a new employment snapshot on Friday.
Some say employers will add around 180,000 jobs in November. Others, however, are still forecasting a gain of 145,000 jobs. Most think that the jobless rate will stay stuck at 9.6 percent.
The economy added 151,000 jobs in October, the first increase in total payrolls in five months. Private companies were responsible for all of the new jobs. But the increase in hiring still wasn't strong enough to lower the unemployment rate.
The claims figures provide economists with important signals about the health of the job market. They are a measure of the level of layoffs and indicate whether companies are hiring.
Difficulties adjusting for the Thanksgiving holiday contributed to last week's spike in new applications, a government analyst said. The unadjusted figures show new claims fell by 54,196 last week.
Thursday's report also showed that the number of people continuing to collect unemployment aid rose to 4.3 million for the week ending Nov. 20. That doesn't include millions of additional people on extended unemployment programs that were set up during the recession.
Overall, 8.9 million people are receiving jobless aid, including 4.9 million that are doing so through the federally funded extended benefit programs. Those provide up to 99 weeks of benefits.
However, the extended programs expired at the end of November. Nearly 2 million will lose unemployment benefits as the holiday arrives if Congress doesn't change its mind and renew the aid.