US stocks open higher as banks fall

US stocks have opened higher but bank shares are lower following Bank of America's quarterly earnings report, which came in close to expectations.

Five minutes into trade on Thursday, the Dow Jones Industrial Average was up 41.31 points, or 0.30 per cent, at 13,552.54.

The broad-based S&P 500 gained 5.51 points, or 0.37 per cent, to 1,478.14.

The tech-heavy Nasdaq Composite rose 14.43 points, or 0.46 per cent, to 3,131.97.

Bank of America shares were down 1.9 per cent after the company reported fourth-quarter earnings that were sharply lower than the year-ago period, heavily dented by write-offs related to settlements related to its mortgage business.

Citigroup fell 3.0 per cent on its earnings disappointment, also hit by mortgage business charges.

Boeing shares lost another 1.3 per cent after its 787 was grounded around the world for safety inspections.

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US housing starts rebound in December

CONSTRUCTION of new US homes rebounded in December, the Commerce Department says, capping a year of strong recovery in the industry.

Housing starts grew to an annual pace of 954,000 units last month, rebounding from November's 851,000, which was depressed by the impact of Hurricane Sandy on the densely populated northeastern coastal region.

The annual pace has picked up from 754,000 units at mid-year 2012 and 697,000 units in December 2011.

The actual number of homes started in 2012 was estimated by the department at 780,000, a sharp 28.1 per cent higher than 2011, showing a sustained recovery in the housing sector after the 2008-2009 recession.

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US jobless claims drop to five-year low

NEW US jobless claims dropped last week to the lowest level in five years as the ailing jobs market slowly improves, official data shows.

Initial claims for unemployment insurance benefits totalled 335,000 in the week ending January 12, down a hefty 37,000, or almost 10 per cent, from the prior week's revised level, the Labor Department reported on Thursday.

The often volatile weekly claims report was lower than the 370,000 analysts expected.

Last week's four-week moving claims average fell to 359,250 from the prior week's 366,000.

Claims, a sign of the pace of layoffs, trended in the 370,000 range for most of 2012.

Marisa Di Natale of Moody's Analytics noted claims were at their lowest level since early January 2008 and fell for the first time in six weeks.

"Over the past few weeks the claims data have been difficult to interpret because of holiday-related volatility," she said.

"Nevertheless, claims are down 27,000 between the December and January payroll survey reference periods which indicates a modest improvement in job growth over the month."

The unemployment rate held steady at 7.8 per cent in December, a four-year low, and job growth last year jumped by 1.4 per cent, the biggest increase in six years.

The January jobs report is scheduled on February 1.

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Vic residents told to leave bushfire zone

RESIDENTS in the east Victorian town of Licola are being told to consider leaving their homes as a fast moving bushfire fanned by changing wind directions threatens the community.

The fire in the eastern part of the Baw Baw National Park had grown from 250 hectares on Thursday afternoon to 4200 hectares that night.

Watch-and-act alerts are advising residents in several surrounding towns to activate their bushfire plans ahead of a wind change expected in the early hours of Friday.

A CFA spokeswoman said strong winds had helped fan the fire, making it fast moving and unpredictable.

Smoke could be seen 50km away, she said.

Residents of Licola have received emergency SMS alerts and are being told to consider leaving the area as soon as possible as the CFA anticipates the blaze will hit Licola Road on Friday.

The CFA warning says the out-of-control fire is expected to impact the towns of Coongulla, Coopers Creek, Cowwarr, Glengarry, Glenmaggie, Heyfield, Licola, Parkers Corner, Seaton, Toongabbie, Glengarry North, Erica and Rawson between 6am (AEDT) and 10am on Friday.

Residents of Maiden Town, Walhalla and Mormon Town are being warned they could be affected by embers from the blaze.

An emergency relief centre has been established at the Sale Baptist Church.

Bureau of Meteorology senior forecaster James Taylor said hot weather overnight combined with gale force winds forecast to hit the region on Friday morning were concerning.

A total fire ban has been declared for the West and South Gippsland, north east, northern country and East Gippsland districts for Friday.

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Canberra community remembers 2003 fires

A DECADE on from the fatal Canberra firestorm, the community will gather for a low key commemoration service.

On January 18, 2003 a bushfire killed four people and destroyed more than 500 homes on the city's western edge.

In the shadow of the bushfires now burning at Cooma and Yass, the people of Canberra will come together on Friday to remember that disaster.

The commemoration will have the theme of Reflection, Inspiration, and Looking Forward.

It will involve speakers from the community, churches and emergency services as well as ACT Chief Minister Katy Gallagher.

ACT Emergency Services Minister Simon Corbell, who lives in the area affected by the fire, says he thinks people's recovery from 2003 has been mixed.

"Many people have very much responded to the confronting nature of the circumstances they faced ... in 2003," he told AAP.

"But for others the impact and the harm caused is still very real and very raw in their emotions."

But he thought the community overall had shown "extraordinary resilience and capacity to grow".

Mr Corbell said the ACT was much better prepared now to deal with "the ever-present threat" of bushfires.

The commemoration service will take place at 10am AEDT at the ACT Bushfire Memorial on the corner of Uriarra and Cotter Roads in Weston.

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NRA head defends using Obama girls in ad

THE head of the powerful National Rifle Association has defended his group's mention of President Barack Obama's daughters in a web ad criticising the administration's moves on gun control.

"Our point is not about the president's kids. It's about everybody else's kids," said NRA president David Keene, speaking to CBS television.

"We think that one of the most important things we can do is provide security to the children of America and we don't think that's an inappropriate message."

The ad, released by the NRA on Tuesday, has been roundly criticised for breaking a cardinal rule in Washington - that the children of a sitting US president are off-limits for criticism or as a political talking point.

The NRA released the ad one day before Obama signed 23 executive actions in a bid to check a rash of gun violence including the killings of 20 children at Sandy Hook Elementary School last month and other recent mass shootings.

The NRA spot asked why Obama is "sceptical about putting armed security in schools when his kids are protected by armed guards at their school?"

Like the children of earlier presidents, the Obama girls - Malia, 14, and Sasha, 11 - receive the protection of armed Secret Service officers wherever they go, including their private Washington, DC school.

The NRA ad slammed the duplicity of "protection for their kids, and gun-free zones for ours".

"Are the president's kids more important than yours?" the NRA's narrator asked in a deep voice.

In a December interview, Obama said he was "sceptical" that an NRA proposal of placing armed security guards at schools around the country was the sole answer to curbing mass shootings.

White House spokesman Jay Carney released a statement on Wednesday responding to the ad shortly before Obama outlined his new gun proposals.

"Most Americans agree that a president's children should not be used as pawns in a political fight," Carney said in a statement emailed to reporters.

"But to go so far as to make the safety of the president's children the subject of an attack ad is repugnant and cowardly."

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Apple's iPhone business 'has no future'

APPLE is going to be trading sideways for the next 12 months, says Pacific Crest analysts Andy Hargreaves and Corey Barrett.

They are downgrading the stock to "sector perform" and giving it a price target between $US440 ($A417) and $US550 ($A522)for the next 12 months.

They believe Apple has real long-term problems.

The high-end market for smartphones and tablets is going to be saturated sooner than expected which will lead to poor growth for Apple.

They say that demand for "incremental" hardware improvements is "waning." Essentially, they don't believe people will continue to upgrade to a new iPhone. If the market for new iPhone buyers is already maxed-out, and the market for upgrading iPhones is weak, then Apple's iPhone business is going to struggle.

While the iPad should pick up the slack for Apple in terms of slowing iPhone growth, the truth is the iPad Mini, which is relatively inexpensive will hurt Apple's revenue and EPS growth.

There is nothing on the horizon that will provide a jolt of growth, either, they argue.

An Apple television isn't going to be a huge business like the iPhone. It will make less money and sell in smaller units.

A cheaper iPhone will create the same problems the cheaper iPad Mini creates - cannibalisation of existing sales and profits.

Software and services revenue from products like iTunes and iCloud aren't going to be enough to accelerate the earnings of a company as big as Apple.

In short, Apple is an iPhone company. The days of the iPhone's mega growth are over and thus, Apple's fantastic stock run is too.

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