Stocks end flat; jobs report on tap
Investors want to see if Friday's unemployment numbers show a growing economy -- or not. Green Mountain Coffee Roasters' results cheer the Street. Jobless claims drop. Macy's boosts 2012 guidance. Zynga shares jump on Facebook excitement.
By Charley Blaine Feb 2, 2012 2:48PM
Updated: 10:20 p.m. ETToday was a day Green Mountain Coffee Roasters (GMCR) had a right to gloat.
Its fourth-quarter earnings results late Wednesday were very strong. So was the maker of the Keurig brewing systems' guidance, and shares were up $12.79 to $66.42.
But Green Mountain's big day and the excitement over Facebook's filing for an initial public offering did not translate into big gains for the stock market overall. In fact, stocks basically ended flat.
The big issue was probably that many investors want to see if Friday's big jobs and unemployment report, due at 8:30 a.m. ET, offers a picture of a growing economy. Much of the December data offered optimism to many investors. But some economic reports this week suggested caution is in order. The consensus estimates are that the economy created perhaps 140,000 jobs in January, with the unemployment rate holding at 8.5%, perhaps a little higher.
The Dow Jones industrials ($INDU) closed down 11 points to 12,705. The Standard & Poor's 500 Index ($INX) was up 1 point to 1,326. The Nasdaq Composite Index ($COMPX) was up 11 points to 2,860, and the Nasdaq-100 Index ($NDX), which tracks the largest Nasdaq stocks, added 8 points to 2,496.
Article continues below.
Facebook did create some narrow interest. Zynga (ZNGA) shares were up $1.79 to $12.39 as Facebook's filing with the Securities and Exchange Commission suggested the game developer helped generate 11% of Facebook's revenue.
LinkedIn (LNKD) jumped $4.61 to $76.98. Renren (RENN), the Chinese social-networking company, added 41 cents to $5.42. Groupon (GRPN) rose $1.59 to $23.08.
Meanwhile, there was decent news on jobless claims, but retailers painted a mixed picture about January sales. Costco Wholesale (COST) had decent results; Abercrombie & Fitch (ANF) did not.
And, while Federal Reserve Chairman Ben Bernanke said there were signs economic conditions at home and in Europe were starting to improve, he repeated to Congress what he has been saying for months: The recovery is fragile. Plus, there was the jobs report to worry about.
In addition to the jobs report, the Commerce Department reports on factory orders, and the Institute for Supply Management issues its January Non-Manufacturing Index. Key reports are due from whiskey distiller Beam (BEAM), cleaning supplies company Clorox (CLX) and cosmetics maker Estee Lauder (EL).
IBM weighs on the Dow
IBM (IBM) was the biggest reason the Dow ended lower. Big Blue was off $1.09 to $191.53. That was enough to subtract 8.25 points from the blue-chip index. Exxon Mobil (XOM), down 44 cents to $83.53, subtracted an additional 3 points from the Dow.
The market was basically split on the day. Sixteen of the 30 Dow stocks were higher, led by Alcoa (AA), Bank of America (BAC) and American Express (AXP).
In addition, 52 Nasdaq-100 stocks were higher, led by Green Mountain Coffee Roasters and BMC Software (BMC), up $2.39 to $38.25. Warner Chilcott (WCRX) was the laggard, down 47 cents to $16.45.
And 254 S&P 500 stocks were higher, led by apparel retailer GAP (GPS), futures-exchange operator CME Group (CME) and Big Lots (BIG). Abercrombie & Fitch and Ameriprise Financial (AMP) were the laggards.
Gold moves higher; crude oil falls for fifth day
While stocks were mixed, gold (-GC) settled up $9.80 to $1,759.30 an ounce, in part because the great debt restructuring between Greece and its private bondholders still isn't resolved. Silver (-SI) settled with a gain of 36.8 cents to $34.175 an ounce. Copper (-HG) dropped 6.1 cents to $3.781 a pound.
Crude oil (-CL), meanwhile, settled down off $1.25 to $96.36 a barrel -- its fifth straight decline -- in part because of low demand and a Wednesday report showing larger-than-expected domestic inventories. But Brent crude, the benchmark North Sea crude, was up 66 cents to $112.22 a barrel.
The dollar was higher against the euro, and U.S. interest rates were lower. The 10-year Treasury yield fell to 1.821% from Wednesday's 1.846%.
| Energy prices -- New York close | ||||||||||||
| Thur. | Wed. | Month chg. | YTD chg. | |||||||||
| Crude oil (-CL) | $96.36 | $97.61 | -2.15% | -2.50% | ||||||||
| (per barrel) | ||||||||||||
| Heating oil (-HO) | $3.0529 | $3.0455 | -0.32% | 4.76% | ||||||||
| (per gallon) | ||||||||||||
| Natural gas (-NG) | $2.5540 | $2.3820 | 2.04% | -14.55% | ||||||||
| (per mil. BTU) | ||||||||||||
| Unleaded gasoline (-RB) | $2.8689 | $2.8922 | -0.76% | 7.96% | ||||||||
| (per gallon) | ||||||||||||
| Brent crude | $112.07 | $111.56 | 0.98% | 4.37% | ||||||||
| (per barrel) | ||||||||||||
| Retail gasoline | $3.4550 | $3.4500 | 0.35% | 5.69% | ||||||||
| (per gallon; AAA) | ||||||||||||
Jobless claims fall, but layoffs gain
Ahead of Friday's monthly unemployment report, the Labor Department said the number of new jobless claims fell by 12,000 to 367,000 in the week ended Jan. 28 from a revised 379,000 in the previous week. Analysts had expected claims to come in at 375,000, down from an originally reported 377,000.
The four-week moving average, which smooths the week-to-week volatility, fell to 375,750, its third straight decline. The moving average has been below 400,000 for 12 straight weeks.
At the same time, U.S. companies cut 53,486 jobs in January, according to outplacement firm Challenger Gray & Christmas, up 28% from the 41,785 jobs shed in December. It was the largest total since 115,730 jobs cuts announced in December.
Retailers and financial companies had the biggest cuts, the company said.
"We are now seeing the recovery extend even into the construction sector, and manufacturing seems to be gathering steam, too," wrote Ian Sheperdson, chief economist at High-Frequency Economics. "Claims are likely to fall further over the next few months, setting the scene for sustained 200,000 (monthly) private payroll gains."
Bernanke: Economy is growing but vulnerable
Bernanke told the House Budget Committee that the economy has shown signs of improvement while remaining vulnerable to shocks, and he called on lawmakers to reduce the long-term U.S. budget deficit.
Bernanke repeated a warning he has made before about calls for abrupt and sharp spending cuts. Those could derail the recovery. In fact, employment in the public sector of the economy has emerged as a drag on overall employment growth.
He was concerned, however, that the economy remained vulnerable to sudden shocks. Such as the European debt crisis. While Committee Chairman Paul Ryan charged the Fed was willing to tolerate more inflation than its 2% annual target to bring down unemployment, Bernanke begged to differ. The central bank will always move to keep inflation lower.
Merck and Pfizer shares drop
Merck (MRK) shares fell 19 cents to $38.44 after fourth-quarter sales disappointed. But the Dow component said growing worldwide sales and favorable exchange rates helped the company report stronger-than-expected profits. Adjusted earnings rose to 97 cents a share on revenue of $12.29 billion as global sales grew 2%. Analysts expected Merck to earn 95 cents a share on revenue of $12.53 billion.
Pfizer (PFE) shares were off 20 cents to $21.11. The pharmaceutical giant said a manufacturing mix-up that led to some birth control pill packs with the pills out of order is leaving women at risk of unwanted pregnancies. Pfizer has recalled about 1 million packets of Lo/Ovral-28 and its generic equivalent. Pfizer shares were down 2.3% at $20.82. The news came as the pharma giant saw earnings slip 50% in the fourth quarter after losing patent protection on its popular cholesterol drug, Lipitor.
Royal Dutch Shell (RDS.A) shares were down 49 cents to $71.74. The oil giant said fourth-quarter profit dropped slightly because of weaker refining results. Net income fell 4.3% to $6.5 billion. Shell's production arm was helped by higher oil prices. But Europe's largest oil company said its refining arm posted a loss.
Credit card company MasterCard (MA) shares rose $23.95 to $381.57. The company's fourth-quarter results blew past estimates. Earnings grew 28% and worldwide purchase volume increased. The credit company said earnings grew to $4.03 a share as revenue climbed to $1.72 billion. Analysts had expected earnings of $3.92 on revenue of $1.73 billion.
Macy's (M) rose $1.24 cents to $35.23 after reporting strong January sales. Same-store sales climbed 2.4% to $1.336 billion, while fourth-quarter same-store sales rose 5.2% and total sales increased 5.5% to $8.72 billion. The retailer boosted its earnings guidance for the fourth quarter to $1.63 to $1.65 a share from earlier forecasts of $1.55 to $1.60 a share.
Costco (COST) shares climbed $2.29 to $85.51. Same-store sales in January climbed 11% to $7 billion as higher gas prices boosted income. Analysts were expecting sales to rise just 6.1%. Even excluding the impact of fuel prices, sales gained 8%, Costco said.
A big mining merger ahead?
Two Swiss companies, Glencore International (GLNCY) and Xstrata (XSRAY), surged today after The Wall Street Journal said the two are in talks to form an $80 billion colossus that would play a powerful role in a global mining and commodities industry that supplies automakers, chocolatiers and a world ravenous for natural resources.
Xstrata produces coal, copper, zinc and nickel. Glencore owns a handful of mining assets and runs a lucrative trading operation that matches up buyers and sellers for everything from nickel to sugar, chocolate and oil. Glencore owns 34% of Xstrata.
Xstrata finished up 37 cents to $3.85 in New York; Glencore added $1.05 to $14.80.
| Short hits from the markets -- New York close | ||||||||||||
| Thur. | Wed. | Month chg. | YTD chg. | |||||||||
| Treasury yields | ||||||||||||
| 13-week Treasury bill | 0.0700% | 0.060% | 0.00% | 600.00% | ||||||||
| 5-year Treasury note | 0.711% | 0.725% | 0.00% | -14.34% | ||||||||
| 10-year Treasury note | 1.821% | 1.846% | 1.22% | -2.67% | ||||||||
| 30-year Treasury bond | 3.007% | 3.015% | 2.49% | 4.08% | ||||||||
| Currencies | ||||||||||||
| U.S. Dollar Index | 79.11 | 79.033 | -0.39% | -1.75% | ||||||||
| British pound | 1.5810 | 1.5858 | 0.14% | 1.75% | ||||||||
| (in U.S. $) | ||||||||||||
| U.S. $ in pounds | £0.633 | £0.631 | -0.14% | -1.72% | ||||||||
| Euro in dollars | $1.31 | $1.32 | 0.05% | 1.47% | ||||||||
| (in U.S. $) | ||||||||||||
| U.S. $ in euros | € 0.761 | € 0.759 | -0.05% | -1.45% | ||||||||
| U.S. $ in yen | 76.34 | 76.20 | -0.15% | -0.99% | ||||||||
| U.S. $ in Chinese | 6.32 | 6.30 | -0.08% | -0.04% | ||||||||
| yuan | ||||||||||||
| Canada dollar | $1.001 | $0.997 | -0.02% | 2.04% | ||||||||
| (in U.S. $) | ||||||||||||
| U.S. dollar | $1.000 | $0.997 | 0.02% | -2.01% | ||||||||
| (in Canadian $) | ||||||||||||
| Commodities | ||||||||||||
| Gold (-GC) | $1,759.30 | $1,749.50 | 1.24% | 12.29% | ||||||||
| (per troy ounce) | ||||||||||||
| Copper (-HG) | $3.781 | $3.842 | -0.24% | 10.04% | ||||||||
| (per pound) | ||||||||||||
| Silver (-SI) | $34.1750 | $33.8070 | 2.74% | 22.43% | ||||||||
| (per troy ounce) | ||||||||||||
| Wheat (-ZW) | $6.6275 | $6.7425 | -0.49% | 1.53% | ||||||||
| (per bushel) | ||||||||||||
| Corn (-ZC) | $6.4300 | $6.420 | 0.63% | -0.54% | ||||||||
| (per bushel) | ||||||||||||
| Cotton | $0.9549 | 0.9479 | 1.04% | 4.16% | ||||||||
| (per pound) | ||||||||||||
| Coffee | $2.1855 | 2.171 | 0.25% | -4.83% | ||||||||
| (per pound) | ||||||||||||
| Crude oil (-CL) | $96.36 | $97.61 | -2.15% | -2.50% | ||||||||
| (per barrel) | ||||||||||||
46Comments
Feb 2, 2012 5:23PM
Gas prices just keep rising higher and higher in my area in Maine. Went up another 6 cents a gallon since yesterday, paying $3.65 a gallon now. Crude oil has stayed about the same or has dropped some, so why do they keep bringing it up? I do not have to worry about cutting back on spending because after I pay all my bills, there is nothing left to put back into the economy. As long as the Greedy Wall Street Traders keep oil prices high nothing will change. How do they think that this is going to help our economy grow?
Feb 2, 2012 3:41PM
Feb 2, 2012 8:10PM
They would rather not count the people dropping out of the workforce, "discouraged", then to report the true unemployment number. If we need to create roughly 150k/month to keep up with the growing workforce how the hell is the unemployment number going down every month? And Rick is right, because of the birth/death model that the labor department uses, January is the month they account (or should) for jobs that were never created. In 2010 they were off by 378,000 and in 2009 they were off by 902,000! The number should be aweful tomorrow but I'm sure they can figure out how to manipulate it to their advantage.....not ours!
Feb 2, 2012 5:43PM
How do they think that this is going to help our economy grow?
It is obvious "THEY DON'T CARE" . Everything that needs to be done to help the AMERICAN PEOPLE they do just the opposite. Actions speak louder than words. They are obviously making more keeping us down than helping us up. WE HAVE BEEN SOLD OUT AS A COUNTRY!!!Feb 2, 2012 3:40PM
little stroll threw history want to raise th price have a shortage or convert to something new . go back to days lot of you won't remember. odd even days for gas shortage when it was all done there were a lot less steel factories . now ever ting is made of plastic fiberglass stock market froze at 300to 500 . well the 401k came about the feds and stock market are now in control of all your money. we have been in trouble for many years problem is there is no more money left to tap into member when bush wanted to put social security into the stock market it was going down the tubes lucky for a lot of people he did not get his wish. what we need in our government is smarter people as it stands right now neither side has anyone qualified to do this so we americans are going to pay a deep price trouble its our kids not them that will pay the price
Feb 2, 2012 6:25PM
The big issue was probably that many investors want to see if Friday's big jobs and unemployment report, due at 8:30 a.m. ET, offers a picture of growing economy
You can bet that these numbers will come in very positive as they are manipulated to make things look better than they really are. It's too bad accurate and truthful numbers can't be reported but that won't happen because investors will pull out of the market and we can't have that...can we?
Feb 2, 2012 3:13PM
Feb 2, 2012 6:21PM
Look for the jobs report tomorrow to be TERRIBLE! Typically January is the month that all of the total prior-year monthly estimates for the number of people in the ranks of the employable (based upon births/deaths) is taken into account. The expectation is that the number of unemployed had beenn off by around 300-350K (25-30K per month). Unless some election-year mystery happens, the numbers tomorrow should not be good.
Feb 2, 2012 10:49PM
“The Greek situation is essentially impossible,” Krugman said. “They will default on their debt. In fact they already have. The question is whether they will also leave the euro, which I think at this point is more likely, than not.”
No kidding, if Greece only pays 30% of bond value but it's voluntary and doesn't trigger CDS it's still a default by any means. Who are the bankers and politicians kidding? That's like the US cutting social security benefits by 70% because they can't afford to raise taxes to pay back the $2.6 trillion they stole from SSA trust fund to protect Europe, Israel and big oil fighting illegal wars in the Middle East. All these governments are run by crooks and liars.
Feb 2, 2012 8:06PM
I was down at my local Department of consumer affairs office renewing some paperwork.
At one time you would have to wait hours to get into the office,today very scary just myself and twenty others at 8:30 AM.
The point I am making is that if business is getting better and people are truly attacking the streets for business this place would have been packed not what was truly seen.
Seniors working there also stated a major drop in application renewals and demand. That also in itself is more of a indication of were the economy and or business is going in this part of LI NY.
Not good sorry to say,and this will not just kill the sprit of many but the employment of people in the long run.
Feb 2, 2012 6:39PM
Feb 2, 2012 8:46PM
Martin Bashir and Congresswoman Sheila Jackson Lee took time to discuss Romney's latest gaffe about not being concerned about the "very poor." The Congresswoman said that Romney's mistake was "literally a catastrophe on his cake." Lee also said that while Trump may be a great American, his endorsement is a bad choice. Bashir lamented the "grotesque" things that are happening "on the other side of the country."
ANNNNNNNNNNNNNNNNNNNNNND THE SOLUTION IS: THROW MORE BORROWED OVER TAXED DOLLARS AT THEM SO THEY CAN GET ONE OF 'DEM' CHEAP HOUSING MORTGAGES AT 0 DOWN O INTEREST FOR LIFE...........! romney has it right as now the left will have to get up and work a little harder to get free anything!!
Feb 2, 2012 11:07PM
Zynga and Coffee. How can you have an economy on Zynga and Coffee? Zynga isn't even based in reality (virtual farms, virtual mafia weapons, etc.). And, the coffee just keeps everyone using Zynga and Facebook. So that's it? No industry, no real products, no real work, but we have virtual food, weapons, and coffee shops with Zynga. Now this is progress!!!
Feb 3, 2012 1:28AM
The Pentagon’s monthly spending in Afghanistan dipped to $5.3 billion in October and November, down from an average of $7.8 billion a month in the fiscal year that ended in September, according to data compiled by the Defense Department comptroller’s office.
And you wonder why we're going broke. Quit spending $60-100 billion a year chasing a bunch of camel jocks around the desert. Bring ALL the tropps home ans tell the rest of the world to protect their own azzs cause we not doing it anymore.
Feb 2, 2012 10:17PM
Feb 2, 2012 4:46PM
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Feb 2, 2012 4:38PM
Feb 2, 2012 7:17PM
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