Jobless rate falls, but so do stocks
US unemployment falls to 8.5% in December, suggesting a strengthening economy. But the Dow drops 56, and the S&P falls 3. Tech gains boost the Nasdaq. Gold and oil drop. A report says Apple may put mini-stores in Target.
Updated: 7:28 p.m. ETThe news on the jobs front in December was better than expected, but investors did not celebrate. Instead, stocks ended the day flat or modestly lower.
The U.S. unemployment rate fell to 8.5%, its lowest level since February 2009, from November's 8.7%. The consensus estimate had been for an 8.7% rate. The economy created an estimated 200,000 jobs; the consensus was for 155,000 jobs. The jobs gain was the best since February.
The market reacted to the jobs report by falling at the open, with the Dow Jones industrials ($INDU) off as many as 83 points by 9:50 a.m. ET. One reason was concern over Europe; the euro fell below $1.28, finishing at its lowest level since September 2010. The euro's decline pushed crude oil (-CL), gold (-GC) and silver (-SI) lower.
The market did rebound from its morning lows, thanks to gains in financial stocks, but faded a bit in the last hour of trading. Bank of America (BAC) fell to as low as $6.06, then recovered to $6.30 before dropping back to $6.18, down 13 cents.
The Dow closed down 56 points to 12,360, after nearly pushing into the black just before noon. The Standard & Poor's 500 Index ($INX) was off 3 points at 1,278. But the Nasdaq Composite Index ($COMPX) was up 4 points to 2,674. the Nasdaq-100 Index ($NDX), which tracks the largest Nasdaq stocks, ended up 7 points to 2,356.
Article continues below.
The market's early swoon -- followed by a bit of a crawl-back -- mirrored Wednesday and Thursday. The S&P 500 looked like it might fall below 1,274, which had emerged as a support level. The support held, and there's chatter the index ultimately could make a run to 1,292 -- its intraday high on Oct. 28.
The first week of 2012 will end with a 1.2% gain for the Dow, a 1.6% gain for the S&P 500 and a 2.7% gain for the Nasdaq. That is a better start for the indexes than the first week of 2011, when the Dow rose 0.8%, with the S&P 500 up 1.1% and the Nasdaq up 1.9%. But just about all of the market's gain for the week came on Tuesday, when the Dow jumped 180 points.
| Markets for the week | ||||||||||||
| 1/6/2012 | 12/30/2011 | % chg. | YTD chg. | |||||||||
| Dow Industrials | 12,359.92 | 12,217.56 | 1.17% | 1.17% | ||||||||
| S&P 500 | 1,277.81 | 1,257.60 | 1.61% | 1.61% | ||||||||
| Nasdaq | 2,674.22 | 2,605.15 | 2.65% | 2.65% | ||||||||
| Russell 2000 | 749.71 | 740.92 | 1.19% | 1.19% | ||||||||
| Crude oil | $101.56 | $98.83 | 2.76% | 2.76% | ||||||||
| (per barrel) | ||||||||||||
| U.S. Dollar Index | 81.60 | 80.52 | 1.34% | 1.34% | ||||||||
| 10-yr. Treasury | 1.96% | 1.87% | 4.81% | 4.81% | ||||||||
| Gold | $1,616.80 | 1,566.80 | 3.19% | 3.19% | ||||||||
About those jobs numbers
The jobs numbers were greeted with some wariness, if only because there are so many head winds facing the domestic economy: Europe, tenuous consumer confidence, high energy prices and a weak housing market.
The economy has created 1.64 million jobs in the last 12 months. That is the net of 1.92 million jobs added in the private sector and 280,000 government jobs lost, mostly at the state and local levels.
There were gains in retail, health care and manufacturing. More than 500,000 retail and health care jobs have been created in the last year. Manufacturing added 225,000 jobs, its best showing since 1997. On a percentage basis, manufacturing's 1.7% gain was its best since 1984 and came after 12 straight years of decline.
Automobile and related manufacturing added 50,000 jobs, the biggest gain since 1994. (But the industry is also employing 595,000 fewer workers than in 2000.)
There were things not to like: Temporary employment fell 8,000. The lack of bad weather may have made the situation look better than it is. A 42,000 gain in couriers and messengers is basically hiring by FedEx (FDX) and United Parcel Service (UPS) for the holidays. Most of those jobs will disappear in January and February.
The so-called alternative measure of unemployment, which includes people working part time or who dropped out of the work force, was 15.2%, an improvement from November's 15.6% and 16.6% in December 2010. But still too high.
A total of 5.6 million people, or 42.5% of those out of work, have been unemployed for 27 weeks or longer.
About 15.7% of African-American men were out of work, although that's down from November's 16.4% and December 2010's 16.8%.
Reactions from economists varied. "This is the real deal for the U.S. economy, at last," wrote Ian Shepherdson of High Frequency Economics. "Wage gains are still very modest, up just 0.2% in December, but the key point is that job growth is accelerating, and there is more to come."
"While the report is encouraging," said Nigel Gault of IHS Global Insight, "we can't take it as proof that the economy has broken out to a much stronger rate of job creation."
| Energy prices -- New York close | ||||||||||||
| Fri. | Thur. | Month chg. | YTD chg. | |||||||||
| Crude oil (-CL) | $101.56 | $101.81 | 2.76% | 2.76% | ||||||||
| (per barrel) | ||||||||||||
| Heating oil (-HO) | $3.0702 | $3.0388 | 5.35% | 5.35% | ||||||||
| (per gallon) | ||||||||||||
| Natural gas (-NG) | $3.0620 | $2.9800 | 2.44% | 2.44% | ||||||||
| (per mil. BTU) | ||||||||||||
| Unleaded gasoline (-RB) | $2.7516 | $2.7365 | 3.54% | 3.54% | ||||||||
| (per gallon) | ||||||||||||
| Brent crude | $113.06 | $112.74 | 5.29% | 5.29% | ||||||||
| (per barrel) | ||||||||||||
| Retail gasoline | $3.3520 | $3.3190 | 2.54% | 2.54% | ||||||||
| (per gallon; AAA) | ||||||||||||
Crude drops; gold down, then up
Crude oil fell 85 cents to $100.99 a barrel as the euro fell. Brent crude was down 48 cents to $112.51.
Gold dropped to as low as $1,609 an ounce, then recovered to settle at $1,616.80, off $3.30. Silver settled down 61.3 cents to $28.68 an ounce. Copper (-HG) was up slightly to $3.435 a pound.
The euro's decline to $1.2765 was a signal that investors were looking for safety. The 10-year Treasury yield dropped to 1.961% from Thursday's 1.993% .
The euro fell on continuing worries about its government debt crisis and pressure on European bank stocks.
In addition, reports showed confidence in the European economic outlook fell to a two-year low. German factory orders dropped by the most in almost three years. The euro may finish with its fifth weekly loss against the dollar in the last six.
Stocks in Germany and France fell slightly. British stocks were higher.
Microsoft and Disney lead the Dow
Only 10 of the 30 Dow stocks were higher today, led by Microsoft (MSFT), up 42 cents to $28.10; Walt Disney (DIS), up 41 cents to $39.91, and McDonald's (MCD) up 77 cents to $100.60. (Microsoft publishes MSN Money.)
The laggards were Alcoa (AA), down 20 cents to $9.16, and Bank of America. The biggest U.S. aluminum producer will close 12% of its global smelting capacity. The decision means a permanent shutdown of its smelter in Alcoa, Tenn., near Knoxville. The problem: Prices have slumped because global supply exceeds demand. Alcoa will report fourth-quarter results after Monday's close.
Bank of America shares fell after an Obama administration official denied speculation that the White House is considering a trillion-dollar plan to refinance home loans. The bank surged Thursday above $6 for the first time since November amid speculation about a refinancing program.
Financial stocks did weaken at the end of the part, partly because analyst Meredith Whitney cut earnings estimates for Goldman Sachs (GS) and Morgan Stanley (MS). Goldman Sachs was off $1.16 to $93.42; Morgan Stanley dropped 38 cents to $15.90. Both stocks, however, moved up for the week.
Fifty-one Nasdaq-100 stocks were higher, led by Netflix(NFLX), up $6.99 to $84.29. Some investors clearly see the company's problems as diminishing. The stock rose 25% this week alone.
Apple (AAPL) was up $4.37 to $422.40 and rose 4.3% for the week. The Apple Insider blog said Apple may open mini-stores in perhaps as many as 25 Target (TGT) locations. The locations would be in markets that can't support a stand-alone Apple store. Target was up 44 cents to $48.95.
A total of 208 S&P 500 stocks were higher, led by Netflix and for-profit education company Devry (DV), up $2.35 to $41.40.
Leaders and laggards
Apollo Group (APOL), up $2.92 to $56.64. The operator of the University of Phoenix and the biggest U.S. for-profit college reported fiscal-first-quarter profit and sales that topped analysts’ estimates as more new students signed up for classes.
Dendreon (DNDN), up $1.73 to $12.35. The maker of the prostate-cancer drug Provenge increased for a second day on optimism that sales of the company’s only product will rise after Dendreon said revenue from Provenge more than tripled in the fourth quarter.
Family Dollar Stores (FDO), down $4.33 to $53.63. The discount retailer reported fiscal-first-quarter revenue of $2.15 billion, missing the consensus estimate of $2.17 billion. Comparable store sales increased 4.1%, compared with the average analyst estimate of 4.9%.
Jazz Pharmaceuticals (JAZZ), up $3.93 to $45.39. The drug maker said earnings in 2012 will be as much as $4.15 a share, compared with the average analyst estimate of $3.39. The forecast reflects earnings after the company completes the acquisition of Azur Pharma.
RF Micro Devices (RFMD), down $1.10 to $4.54. The maker of chips and radio systems for mobile phones cut its forecast for fiscal-third-quarter revenue to $225 million from $250 million. The company was cut to "market perform" from "outperform" at Oppenheimer & Co. The company blamed weaker-than-expected sales of 2G components to China-based customers for entry-level handsets, among other things.
| Short hits from the markets -- New York close | ||||||||||||
| Fri. | Thur. | Month chg. | YTD chg. | |||||||||
| Treasury yields | ||||||||||||
| 13-week Treasury bill | 0.0200% | 0.050% | 100.00% | 100.00% | ||||||||
| 5-year Treasury note | 0.856% | 0.878% | 3.13% | 3.13% | ||||||||
| 10-year Treasury note | 1.961% | 1.993% | 4.81% | 4.81% | ||||||||
| 30-year Treasury bond | 3.016% | 3.057% | 4.40% | 4.40% | ||||||||
| Currencies | ||||||||||||
| U.S. Dollar Index | 81.597 | 81.250 | 1.34% | 1.34% | ||||||||
| British pound | 1.5463 | 1.5501 | -0.48% | -0.48% | ||||||||
| (in U.S. $) | ||||||||||||
| U.S. $ in pounds | £0.647 | £0.645 | 0.48% | 0.48% | ||||||||
| Euro in dollars | $1.28 | $1.28 | -1.48% | -1.48% | ||||||||
| (in U.S. $) | ||||||||||||
| U.S. $ in euros | € 0.783 | € 0.782 | 1.50% | 1.50% | ||||||||
| U.S. $ in yen | 77.40 | 77.10 | 0.39% | 0.39% | ||||||||
| U.S. $ in Chinese | 6.33 | 6.30 | 0.13% | 0.13% | ||||||||
| yuan | ||||||||||||
| Canada dollar | $0.980 | $0.000 | -0.09% | -0.09% | ||||||||
| (in U.S. $) | ||||||||||||
| U.S. dollar | $1.021 | $1.019 | 0.08% | 0.08% | ||||||||
| (in Canadian $) | ||||||||||||
| Commodities | ||||||||||||
| Gold (-GC) | $1,616.80 | $1,620.10 | 3.19% | 3.19% | ||||||||
| (per troy ounce) | ||||||||||||
| Copper (-HG) | $3.435 | $3.427 | -0.03% | -0.03% | ||||||||
| (per pound) | ||||||||||||
| Silver (-SI) | $28.6830 | $29.2960 | 2.75% | 2.75% | ||||||||
| (per troy ounce) | ||||||||||||
| Wheat (-ZW) | $6.2475 | $6.2925 | -4.29% | -4.29% | ||||||||
| (per bushel) | ||||||||||||
| Corn (-ZC) | $6.4350 | $6.44 | -0.46% | -0.46% | ||||||||
| (per bushel) | ||||||||||||
| Cotton | $0.9552 | 0.9448 | 4.19% | 4.19% | ||||||||
| (per pound) | ||||||||||||
| Coffee | $2.2455 | 2.223 | -2.22% | -2.22% | ||||||||
| (per pound) | ||||||||||||
| Crude oil (-CL) | $101.56 | $101.81 | 2.76% | 2.76% | ||||||||
| (per barrel) | ||||||||||||
You can rest assured that everyone could ride mopeds and you would still complain about the price of gas. They are going to get theirs regardless. Keep believing the supply and demand crap or the value of a dollar determines the price horse$hit if you like. Everyone knows our goverment is in on the screwing we are getting that is why you never hear a politician discuss it. Alternative fuels aren't the answer as they will rape you with it just as they do oil because it would be bought and traded the same way. Better figure out a way to fend for yourself because the goverment is out to take everything you have and leave you with nothing with the help of all their special interest groups. If you can't see it oh well because they sure as hell ain't trying to hide it because they are untouchable. They made it that way!!!!
Goverment is in on it brent011. They encourage it, it's what we call insider trading and they call it a PERK. They are getting filthy rich.Passed a gas station that has been closed since Hurricane Katrina in Aug 05. The signs are still up and gas was 1.33 for regular. Sound like old timers sitting around talking about the "Good ol Days."
They have taken the ball since then and run it straight to hell and haven't let up. I hope it causes a vacuum and sucks all of them straight to hell with it!!!!!!!!!
Seriously, does anyone believe the unemployment picture is improving??? The Obama administration has to do everything it can to spin fictitious numbers to make people “think” it’s getting better and to accomplish that, they have the help of the mainstream media that is willfully ignoring some HUGE facts.
Consider:
- Large numbers of illegals lost their jobs between 2005 – 2008 in construction and related industries … not being counted as unemployed but those jobs were certainly lost.
- Large numbers of legitimate workers (citizens and aliens alike) lost their jobs during the same period, with virtually all of them having now exhausted their benefits and are thus not being counted as unemployed simply because they’re no longer on the rolls.
- Additional numbers of workers have lost jobs and have simply given up looking for work. Because they’re conveniently not actively seeking jobs, they’re not considered as unemployed so they’re not being counted. It’s pretty convenient when for the administration when they’re busily spinning the data to try to make it look like the Obama policies are working when they’re actually failing miserably.
- Many more workers have lost jobs in the last two years and are still collecting benefits so they are actually being counted.
- Further layoffs are anticipated as companies like Sears/K-Mart and others close more stores due to a sick economy.
Add up all these groups and the phony unemployment rate of 12% in California is actually much closer to 25%. Nevada’s unemployment, with an admitted rate over 13% is in fact closer to 35%!!!! Drive a car during what used to be rush hour and see how few people are actually on their way to work and it’s pretty obvious the government is lying about how bad it really is.
Why does it matter? Because if Americans truly want change, we have to elect new leaders who realize that Socialist/Fascist/Progressive/Collectivist policies kill incentive, discourage growth, steal wealth from producers to give to non-producers and ultimately these policies fail, as they have in EVERY country that has ever tried them. Those who promote these policies are living proof that if you rob from Peter to pay Paul, you can always count on support from Paul. But when Peter no longer has anything left to steal, it’s pretty much game over.
All people on welfare should be drug tested and not be allowed to spend their monies received in the program for cigarettes or alcohol.
If you can smoke and drink go out and clean the streets or fix pot holes they will fit right in.
Then you have to deal with the health ramifications of such a poor health choice just driving up health care on the governments medicaid program.
Wonder how much monies would be saved if they implemented such a rule and actually enforced it.
Must be billions.
The jobless rate fell for December, big whoop. Let's see what it is for January when all the holiday part time and temp jobs end.
Just as a side thought, let's put a 100% tax on those in the House and Senate to help the economy and see how long it takes them after that, to start working. That's a joke, even in a good economy they don't do anything, except take credit for it.
What a wonderful country we use to have. That is before the politicians and their lobbyist friends raided it. I'm not sure what it is or may become now.
Yes deklen,
1st line ,
"Borrowing got us into this mess"
That has been for many years. This must stop ,that was my point.
We all want a better country for our families.
But we must be honest and take blame all around.
We The People must vote out all we can and be more awaire of our decicions.
I used to vote Rep. line and just click it right down the line, I don't do that anymore.
Peace.
who-what -when - an where. were these jobs at?
An how will this help now that they are trying to make it easier for out of country visitors to receive a green card to live an work here????? doesn't any one want to be president except the only one saying we need to look within to save ourselves??????? Think about it no jobs citizens on food stamps but can't find work, who want to work an our president wants to make it a faster track for them to come here?????? Something is not right with this picture!!!!!
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