Stocks slip ahead of jobs report

The Dow nearly hits 11,000 but ends off 19 points. Investors cheer Alcoa results. Retailers see decent September sales. Analysts see the U.S. jobless rate rising to 9.7%.

By Charley Blaine Oct 7, 2010 1:51PM
Charley BlaineUpdated: 6:48 p.m. ET

Stocks mostly slipped today, the day before the Labor Department releases its big jobs report for September.

The declines came despite a bullish report on jobless claims and better-than-expected same-store sales for many retailers.
Offsetting the good news was that the dollar moved higher, so commodities and commodity stocks moved lower. Gold had its biggest one-day drop since July. Crude oil fell nearly 2%.

The Dow Jones industrials ($INDU) came within 1.5 points of 11,000 right after the open, promptly headed south and then began to trim its losses. The blue chips closed down 19 29 points to 10,949. The Standard & Poor's 500 Index ($INX) was off 2 points to 1,157, and the Nasdaq Composite Index ($COMPX) was up 3 points to 2,382.

After the close, Dow component Alcoa (AA) reported 9 cents a share in earnings after one-time items, ahead of the Street estimate of 6 cents. Revenue was $5.35 billion, up 15% from a year ago and ahead of the Street estimate of $4.95 billion. The company boosted its forecast of global aluminum demand from 12% this year to 13%. Shares were up 2.2% after hours to $12.47 after falling 1.4% to $12.20 in regular trading.

Among stocks making big moves:
  • Adobe Systems (ADBE), up 11.5% to $28.69, tops among S&P 500 and Nasdaq-100 ($NDX.X) stocks. A New York Times report of a meeting between company and Microsoft (MSFT) executives suggested that a merger might be a way to combat Apple. (Microsoft publishes MSN Money.)
  • Abercrombie & Fitch (ANF), up 10.1% to $42.47. The gain was the third biggest among S&P 500 stocks. The teen apparel retailer reported September sales of $305 million, up 25% from a year ago. Same-store sales were up 13%, beating Street estimates.
  • Marriott International (MAR), down 6.3% to $35.46 -- the worst for an S&P 500 stock. The largest U.S. hotel chain reported third-quarter profit of 22 cents a share, trailing the average analyst estimate by a penny.
  • PepsiCo (PEP), down 3.2% to $65.95. The world's largest snack-food producer said full-year per-share earnings will rise as much as 11%, less than its prior forecast of up to 12%. The company earned $1.22 a share in the third quarter, meeting analyst estimates.
  • First Solar (FSLR), up 1.6% to $140.92. The world's biggest maker of solar-power modules said it signed contracts with seven customers for a 380-megawatt increase in orders in the European markets for 2011.
After the close, Micron Technologies (MU) reported its first annual profit in four years.

But the chip maker earned 32 cents a share  in its fiscal-fourth quarter, missing the Street estimate of 39 cents. Revenue for the quarter was $2.49 billion. Shares fell 1.3% after hours to $7.02 after rising 2.3% to $7.11 in regular trading.

Gold takes a dive
Gold settled down $12.70 to $1,135. That's just the second decline in the past 10 sessions and the largest since July 27, when gold fell $25.10 to $1,158.

As a result, Freeport-McMoRan Copper & Gold (FCX) was off 2.6% to $91.16. Newmont Mining (NEM) was down 2.6% to $62.98.

Crude oil fell $1.56 to $81.67 a barrel as concern built about huge global inventories. Exxon Mobil (XOM) was off 0.3% to $63.77. Schlumberger (SLB) dropped 0.2% to $62.98.

Interest rates were lower, with the 10-year Treasury yield falling to 2.396% from 2.399% on Wednesday.

The dollar was higher against major currencies. The U.S. Dollar Index, which measures the greenback against a basket of currencies, was up

The Bank of England held its key interest rate at 0.5% for the 20th consecutive month and kept its asset-purchase program on hold. The European Central Bank, which sets monetary policy for countries that use the euro, also left its main interest unchanged at 1%.

Energy prices -- New York close
 

Thur.

Wed.

Month chg.

YTD chg.
Crude oil 

$81.67

$83.23

2.13%

2.91%
(per barrel)











Heating oil

$2.2518

$2.3078

-7.71%

6.44%
(per gallon)











Natural gas 

$3.6170

$3.8650

-6.59%

-35.09%
(per mil. BTU)











Unleaded gasoline

$2.1180

$2.1559

3.58%

3.17%
(per gallon)











Retail gasoline

$2.7680

$2.7510

2.94%

4.89%
(per gallon; AAA)













The day's good news, part 1: Decent jobless claims

The Labor Department said new requests for unemployment benefits decreased by 11,000 to 445,000 in the week ended Oct. 2, down from a revised 456,000 in the previous week.

Economists had expected the number to increase by 2,000, according to Briefing.com.


It was the fourth drop in the past five weeks, and the weekly claims number has fallen 11% since peaking at 504,000 in the week that ended on Aug. 14. 


The betting is that the Labor Department will report a gain of some 55,000 to 60,000 private-sector jobs in September. Overall jobs will decline because the government is laying off  workers from the U.S. census. The unemployment rate is expected to rise to 9.7%.


The report comes out at 8:30 a.m. ET. Futures trading suggests a quiet -- and flat -- open for Friday, but jobs report could change the trend instantly.


The day's good news, part 2: Decent September retail sales

U.S. same-store sales climbed 2.8% in September, on average, according to Thomson Reuters, which tracks 28 retailers. Analysts had expected sales to increase 2.1%.


The report gave retailers hope for a decent holiday shopping season.


Limited (LTD) said September same-store sales jumped 12%, triple the 4% anticipated rise. Total sales at the parent of Victoria's Secret and Bath & Body Works were up 12.4% to $735.8 million. For the year thus far, same-store sales are up 9%.

Dillard's (DDS) said same-store growth was 3%. Analysts had expected flat sales.

Macy's (M) saw same-store sales rise 4.8%, ahead of the expected 3.3% pace. Total sales rose 6.9%.

Target (TGT) said same-store sales grew just 1.3%. The Street was looking for 1.9%. Total sales were up 3.1% to $5.56 billion.

Gap (GPS) saw same-store sales fall 2% against flat estimates, although total sales rose 1% to $1.34 billion.

 

Shares of Costco Wholesale (COST) were shedding 1.1% to $64.67 despite a higher target and stronger estimates from Morgan Stanley. Citigroup lowered its target and estimates for the retailer. McAdams Wright downgraded the stock to hold from buy.


Material from The Street.com was incorporated into this post.

Short hits from the markets -- New York close
 
  Thur.

Wed.

Month chg.

YTD chg.
Treasury yields




 





13-week Treasury bill

0.120%

0.110%

-20.00%

140.00%
5-year Treasury note 

1.140%

1.164%

-11.90%

-57.56%
10-year Treasury note

2.396%

2.399%

-5.07%

-37.65%
30-year Treasury bond

3.713%

3.665%

0.43%

-20.00%
Currencies







 

 
U.S. Dollar Index

77.642

77.620

-1.64%

-0.74%
British pound

$1.5876

$1.5891

0.98%

-1.86%
(in U.S. $)











U.S. $ in pounds

£0.6299

£0.6293

-0.97%

1.89%
Euro in dollars

$1.3922

$1.3930

1.92%

-2.87%
(in U.S. $)











U.S. $ in euros

€ 0.7183

€ 0.7179

-1.88%

2.95%
U.S. $ in yen 

82.58

82.89

-1.32%

-11.21%
U.S. $ in Chinese

6.72

6.69

0.00%

-1.58%
yuan











Canada dollar

$0.983

$0.990

1.11%

3.33%
(in U.S. $)











U.S. dollar 

$1.018

$1.011

-1.10%

-3.23%
(in Canadian $)











Commodities

 

 

 

 
Gold

$1,335.00

$1,347.70

1.94%

21.78%
(per troy ounce)











Copper

$3.6795

$3.7530

0.77%

9.95%
(per pound)











Silver

$22.5840

$23.0430

3.50%

34.07%
(per troy ounce)











Wheat 

$6.5925

$6.5825

-2.19%

21.75%
(per bushel)











Corn

$4.9825

$4.8850

0.50%

20.21%
(per bushel)











Crude oil 

$81.67

$83.23

2.13%

2.91%
(per barrel)










 

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