Stock Market News for October 8, 2012 - Market News
08 Outubro 2012 - 6:06AM
Zacks
Markets failed to sustain Friday’s
initial gains, spurred by a fall in the unemployment rate, and
ended mixed. The unemployment rate was at its lowest since 2009 and
that helped benchmarks secure gains in the morning session.
However, the benchmarks came off their highs with some
apprehensions ahead of the start of earnings season. For the week
though, benchmarks had a winning run and ended with gains after
closing in the red for two weeks. Moreover, the Dow notched up its
highest level since December 2007.
The Dow Jones Industrial Average
(DJI) ended 0.3% higher at 13,610.15. The Standard & Poor 500
(S&P 500) slipped a mere 0.03% or 0.47 points to close Friday’s
trading session at 1,460.93. The tech-laden Nasdaq Composite Index
was down 0.4% and closed at 3,136.19. The fear-gauge CBOE
Volatility Index (VIX) slipped 1.5% to settle at 14.33. Total
volumes on the New York Stock Exchange were 3.18 billion shares.
The advance and decline ratio on the NYSE was even; as for 49%
stocks that gained, an equal percentage of stocks ended in the
red.
The big news for the day was the
government’s non-farm payroll numbers. The non-farm payroll gains
were in line with expectations, but the encouraging side to the
report came from the positive revisions to the preceding two months
data and unemployment rate dropped to its lowest since 2009. The
U.S. Bureau of Labor Statistics reported that total non-farm
payroll employment was up by 114,000, in line with consensus
estimates. Apart from healthcare, transportation and warehousing,
the other sectors showed little change. As for the positive side,
the change in total nonfarm payroll employment was revised higher
both for July and August. While July’s figures were revised up from
141,000 to 181,000; August’s figures went up to 142,000 from
96,000.
However, the biggest positive for
the market was the fact that unemployment rate dropped by 0.3% to
7.8% last month. Not only was this well below consensus estimates
of 8.2%, but the unemployment rate dropped below 8% for the first
time in almost four years. In September, the number of unemployed
persons fell by 456,000. Further, the report noted: “The number of
job losers and persons who completed temporary jobs decreased by
468,000 to 6.5 million…The number of persons unemployed for less
than 5 weeks declined by 302,000 over the month to 2.5
million”.
The report did have a lot for the
financial markets, but also had implications for the political
arena. While President Barack Obama said: “This country has come
too far to turn back now,”; Republican candidate Mitt Romney said:
“This is not what a real recovery looks like”.
The non-farm payroll data comes hot
on the heels of the Automatic Data Processing’s (NASDAQ:ADP)
National Employment Report and initial claims data. On Wednesday,
ADP data revealed that U.S. companies added 162,000 jobs in
September, higher than the expected 143,000. On Thursday, the U.S.
Department of Labor reported that seasonally adjusted initial
claims for the week ending September 29 rose 4,000 from the prior
week to 367,000, just shy of the consensus estimates of 368,
000.
As mentioned earlier, benchmarks
failed to sustain the gains. The Dow was up almost 86 points before
dropping lower. The third quarter earnings season is about to kick
off and Alcoa, Inc. (NYSE:AA) will be reporting its results on
Tuesday. Certain market experts said that the earnings season might
not be encouraging enough for the markets. Through the week,
financial bellwethers including Wells Fargo & Company
(NYSE:WFC) and JPMorgan Chase & Co. (NYSE:JPM) will be
reporting their results.
Coming to the sectors, the
technology sector had a bad run. The Technology Select Sector SPDR
(XLK) fell 0.5%. Tech bellwether Apple Inc. (NASDAQ:AAPL) slumped
2.1% and other stocks such as NetApp Inc. (NASDAQ:NTAP), Oracle
Corporation (NASDAQ:ORCL), Microsoft Corporation (NASDAQ:MSFT), Red
Hat, Inc. (NYSE:RHT) and Hewlett-Packard Company (NYSE:HPQ) dropped
1.5%, 1.6%, 0.6%, 1.1% and 1.4%, respectively.
ALCOA INC (AA): Free Stock Analysis Report
AUTOMATIC DATA (ADP): Free Stock Analysis Report
HEWLETT PACKARD (HPQ): Free Stock Analysis Report
(JPM.AAPL): ETF Research Reports
MICROSOFT CORP (MSFT): Free Stock Analysis Report
NETAPP INC (NTAP): Free Stock Analysis Report
ORACLE CORP (ORCL): Free Stock Analysis Report
RED HAT INC (RHT): Free Stock Analysis Report
WELLS FARGO-NEW (WFC): Free Stock Analysis Report
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