Finances

Kroger Co. (KR), one of the world's largest retailers, announced its third quarter earnings on November 29.

The company reported third quarter sales of $21.8 billion. The company's third quarter sales represent an increase of 5.9% from the same period last year when it reported sales of $20.6 billion.

Kroger also reported net earnings of $316.5 million for the quarter. This figure is an increase from the same period last year when the company reported net earnings of $195.9 million.

David B. Dillon, Kroger's Chairman and Chief Executive Officer, said, "Kroger achieved our growth objectives for the quarter, including positive identical supermarket sales, operating profit growth and outstanding tonnage growth. This quarter illustrates that the strength of our core business positions Kroger to accelerate our earnings per share growth."

Kroger is one of the world's largest retailers and employs more than 339,000 associates who serve customers in 2,422 supermarkets and multi-department stores in 31 states. Kroger operates under two dozen banners including Kroger, City Markets, Dillon's, Food 4 Less, Fry's and Ralphs.

Kroger Co. (KR) shares ended the week at $26.24.

No Breakfast at Tiffany's as Company Reports Weak Quarterly Earnings

Tiffany & Co. (TIF), a luxury jewelry company, reported its quarterly earnings on November 29.

Tiffany reported third quarter net sales of $853 million. This represents an increase of 4% from the same period last year when the company reported net sales of $823 million.

The company also reported net earnings of $63 million for the quarter. This is a decrease of 30% from last year's third quarter when the company reported net earnings of $90 million.

"Three months ago, we had anticipated that third quarter results would be affected by continued economic weakness in many markets as well as by challenging comparisons to last year when net sales were up 21% and net earnings had increased 52% excluding nonrecurring items," said Michael J. Kowalski, Chairman and Chief Executive Officer. "However, gross margin was weaker than we expected and Tiffany's effective tax rate was higher than we expected. As a result, net earnings were below our expectations."

Tiffany & Co. is a multinational luxury jeweler headquartered in New York City. The company is renowned for its diamonds, especially its diamond engagement rings.

Tiffany & Co. (TIF) shares ended the week at $58.98.

Barnes & Noble Shelves its Quarterly Earnings

Barnes & Noble, Inc. (BKS), a book retailer, announced its fiscal 2013 second quarter earnings on November 29.

The company reported second quarter revenue of $1.88 billion. This represented a 4% decrease from the same period last year when the company reported revenue of $1.89 billion.

Barnes & Noble also reported consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) of $65 million for the quarter. This represents a 16% increase from the same period last year when the company reported EBITDA of $56 million.

William Lynch, Chief Executive Officer of Barnes & Noble, said, "In addition to growing our EBITDA 16% during the quarter, the company also completed the formation of our promising NOOK Media subsidiary and closed our investment from Microsoft. We expect our two highly acclaimed new NOOK products, and our Microsoft partnership on Windows 8 to further fuel the growth of our digital business, and are encouraged by the promising start to the holidays in our retail and digital businesses."

Barnes & Noble is a Fortune 500 company that operates 689 bookstores in 50 states and one of the web's largest e-commerce sites.

Barnes & Noble, Inc. shares ended the week at $14.35.

The Dow started the week at 12,837 and closed at 13,026. The S&P 500 started the week at 1,391 and ended at 1,416. The NASDAQ started the week at 2,927 and finished at 3,010.

Treasuries rose last week over concern that U.S. lawmakers will be unable to reach a deal to avoid the upcoming fiscal cliff. The 10-year note yield traded at one-week lows and U.S. debt extended gains after a report showed consumer spending declined in October because of Superstorm Sandy.

However, the bad economic news is not necessarily bad for Treasuries. "The harder the cliff, the better off it is for the Treasury market, which does better during bad economic times or uncertain geopolitical times, because they benefit from a flight to quality," said Gary Pollack, head of fixed income trading at Deutsche Bank AG's private-wealth-management unit.

Concern that the U.S. will go over the fiscal cliff grew yesterday after Republican lawmakers rejected President Obama's proposal of tax increases and spending cuts. Presented to lawmakers by Treasury Secretary Timothy Geithner, the proposal called for nearly $1.6 trillion in specific tax increases and $400 billion in undefined spending cuts over the next decade.

"I'm disappointed in where we are," Republican House Speaker John Boehner said. "Going over the fiscal cliff is serious business. And I'm here seriously trying to resolve it. And I would hope the White House would get serious, as well." He added, "There is a real danger of going off the fiscal cliff."

If U.S. lawmakers could reach a compromise on the fiscal cliff, even a modest one, that may be enough to move markets. "The most likely outcome will be some form of compromise, which will be beneficial for risky assets and a slight negative for Treasuries, so we'll see yields rise," Pollack said.

The 10-year Treasury note yield finished the week at 1.61% while the 30-year Treasury note yield finished the week at 2.79%.

Freddie Mac released the results of its weekly Primary Mortgage Market Survey (PMMS) on November 29. The results showed that average fixed mortgage rates remained near their record lows.

The 30-year FRM averaged 3.32% this week. That represents an increase from last week when it averaged 3.31%. Last year at this time, the 30-year FRM averaged 4%.

The 15-year FRM averaged 2.64% this week. This represents an increase from last week when it averaged 2.63%. One year ago, the 15-year FRM averaged 3.30%

Frank Nothaft, Vice President and Chief Economist at Freddie Mac, said, "Mortgage rates were virtually unchanged this week amid growing concerns around the fiscal cliff. Although low mortgage rates failed to boost new home sales in October, year-to-date sales are up 20% compared with 2011 volumes, and there are growing signs of a turnaround in house prices. The S&P/Case-Shiller® national home price index (seasonally adjusted) rose 5.2% over the first three quarters of this year. In addition, all 20 of the city indices (seasonally adjusted) had positive growth over the first 9 months, led by a 17.9% increase in Phoenix. More recently, the Federal Reserve's November 28th regional economic review, known as the Beige Book, noted that 10 of the 12 districts reported the market for single-family homes continued to improve leading into mid-November."

The money market fund finished this week at 0.5%. The 1-year CD finished at 0.7%.