By Ben Fox Rubin
Stocks got a boost Friday as U.S. jobs growth was better than
expected for November, though sluggish consumer sentiment data
tempered investor enthusiasm. Despite the general positivity for
the economy's momentum, fiscal cliff talks should continue to cast
a shadow over markets.
Quarterly Results from Costco, Teavana
Only a few major U.S. companies are scheduled to report
quarterly results next week, with Costco Wholesale Corp. (COST)
being the biggest name on the list.
The wholesale-club operator is set to release its fiscal
first-quarter report on Wednesday. In anticipation of potentially
higher taxes next year, Costco last month approved a special
dividend of $7 a share, which should cost about $3 billion and will
be funded through debt.
Analysts are expecting higher earnings and revenue, as Costco
has posted stronger monthly same-store sales through the latest
period, with November's 6% increase easily beating market
estimates.
Additionally, loose-leaf tea retailer Teavana Holdings Inc.
(TEA), which Starbucks Corp. (SBUX) last month agreed to buy for
about $620 million, is scheduled to report Monday.
Other companies slated to report are software firm Adobe Systems
Inc. (ADBE), retailer Pier 1 Imports Inc. (PIR) and
electronic-payments company VeriFone Systems Inc. (PAY).
Fiscal Cliff Talks to Continue
House Speaker John Boehner (R., Ohio) on Friday sounded a
downbeat note about talks to avoid a so-called fiscal cliff, saying
that no progress had been made.
Still, Mr. Boehner sidestepped a question about whether
Republicans would go along with allowing the top individual rate to
rise, but not all the way to the 39.6% rate demanded by President
Barack Obama.
"There are a lot of things that are possible to put the revenues
the president seeks on the table," Mr. Boehner said. "But none of
it is going to be possible if the president insists on his
position, insists on my way or the highway."
Mr. Boehner and Mr. Obama have been trying to find a way to
avoid $500 billion in tax increases and spending cuts set to kick
in January, though the discussions have been punctuated by a series
of adversarial public comments from both Democrats and
Republicans.
Mr. Obama has insisted that tax rates increase on high earners.
Mr. Boehner has agreed to higher tax revenue, but only through
closing tax loopholes. He says that higher tax rates would harm
small businesses that report income through the tax forms of
individual owners.
A123 to Seek Approval for Sale
A123 Systems Inc. (AONEQ) plans to seek bankruptcy-court
approval Tuesday to sell itself to the winning bidder of an auction
that began Thursday.
The government-backed maker of batteries for electric cars
sought Chapter 11 protection in October with a deal in hand to sell
its automotive-business assets to Milwaukee-based auto-parts
manufacturer Johnson Controls Inc. (JCI). The deal included the
Michigan factory for which A123 in 2009 received nearly $250
million in grants from the Department of Energy to construct.
However, bankruptcy laws generally require such deals to be
tested at the auction block. A123 drew the interest of several
bidders ahead of Thursday's auction, which was expected to last
more than one day given the complexity of its business.
Fed Meeting Part of Busy Week for Data
A handful of reports will occupy the time of investors, who will
also need to keep tabs on the Federal Reserve's two-day
policy-setting meeting.
The meeting, on Tuesday and Wednesday, will also include a press
conference with Chairman Ben Bernanke.
The Fed on Friday also said it will consider a draft proposal to
impose tough new rules on foreign banks with large U.S. operations
next week. The Fed posted a notice on its website announcing it
would hold an open meeting next Friday to consider the foreign-bank
rule.
Three price reports are on tap next week, and economists
forecast the top-line numbers all will be held down by falling fuel
prices.
Import prices will be reported Wednesday. The median estimate of
economists surveyed by Dow Jones Newswires is that the import price
index dropped 0.5% in November, reversing a 0.5% gain in October.
Similarly, economists expect the producer price index, out
Thursday, and the consumer price index, due Friday, to be held down
by energy costs.
SolarCity, PBF Energy IPOs to Launch
Solar energy company SolarCity Corp. is expected to launch its
initial public offering next week.
The company serves customers in 14 states--most around the East
and West Coasts--and intends to expand internationally. SolarCity
generates revenue from a mix of residential customers, government
entities and companies such as Wal-Mart Stores Inc. (WMT) and Intel
Corp. (INTC). Since its founding in 2006, the company has provided
or contracted to provide systems or services on more than 33,000
buildings, it has said.
Independent petroleum refiner PBF Energy Inc. is expected to
start trading next week, as well.
(Siobhan Hughes, Kathleen Madigan, Victoria McGrane and
Jacqueline Palank contributed to this report.)
-Write to Ben Fox Rubin at ben.rubin@dowjones.com