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Pre-Market Primer: Dividends Led to Higher December Incomes


But consumer spending rose by less than expected.

Stocks are mixed today after news that US personal incomes rose more than expected.

Initial claims for unemployment insurance came in higher than expected last week. 368,000 Americans filed as unemployed last week, 30,000 more than the week before. Economists expected only 351,000 claims.

US consumer spending rose 0.2% in December, while incomes rose 2.6%. An income rise of 0.3% was expected, but special dividends from companies padded American's pockets last month.

Tomorrow, the Super Bowl of economic indicators, the non-farm payrolls report, is expected to show 185,000 new hires in January and a tenth of a percentage point drop in the unemployment rate to 7.7%.

Index futures were mixed before the opening bell. Dow (INDEXDJX:.DJI) futures were up 0.01% at 13,839. Futures contracts on the S&P 500 (INDEXSP:.INX) ticked up 0.01% to 1,495.50 and Nasdaq (INDEXNASDAQ:.IXIC) futures slipped 0.22% to 2,729.75. European and Asian markets were negative today following the surprise contraction in the US economy. Japan's Nikkei (INDEX:.NI225) however ended the day up slightly.

Shipping giant and global economic bellwether UPS (NYSE:UPS) saw shares decline by 1.6% this morning after reporting earnings per share of $1.32, missing expectations by a nickel. The company blames the shortfall on headwinds from Hurricane Sandy and uncertainty stemming from the fiscal cliff debate. Revenue of $14.53 billion beat estimates.

Facebook (NASDAQ:FB) reported earnings per share of $0.17 yesterday. Ad sales rose 41% to $1.33 billion and overall revenue rose 40% to $1.59 billion. Despite beating earnings expectations, shares fell 6.34% in the pre-market due to a fall in net income.

Research In Motion (NASDAQ:RIMM) shares fell 12.01% yesterday after the long-awaited BlackBerry Z10 and Q10 were revealed. The tech press mostly gave the radically different phones favorable reviews, but investors apparently aren't impressed. Analysts at Nomura believe that sales will probably rebound in the second quarter as enterprise customers warm up to the new ecosystem, but they doubt the company can sell enough of the new phones to make up for years of lost market share. The company's shares fell another 4.5% to $13.17 in the pre-market.

German retail sales disappointed. In December, sales fell 1.7%. Economists expected a modest 0.1% decline. From the year-earlier period, they fell 4.7%. With exports slumping, this data dashes hopes that consumer spending will save Europe's biggest economy. Unemployment in the country unexpectedly fell to 6.8%.

Japanese industrial production grew by 2.5% on a monthly basis in December, missing estimates. In November, the indicator fell 1.4%.

British consumer confidence rose in January, according to research group GfK. The index rose to -26 from -29, showing that Brits were still pessimistic this month, but less so than last.

Twitter: @vincent_trivett
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