Stocks struggle after August jobs data
US nonfarm payrolls rose a weak 96,000 in August. The unemployment rate fell to 8.1%. Intel lowers its Q3 revenue outlook.
Stocks were little changed Friday after the government's monthly employment report showed job growth slowed sharply in August.
The Dow Jones Industrial Average ($INDU) was down 13 points at 13,279. The S&P 500 ($INX) was up 3 points at 1,435. The Nasdaq Composite ($COMPX) was down 4 points at 3,132.
On Thursday, U.S. markets soared as investors cheered the European Central Bank's bond-buying plan and were encouraged by several jobs reports. The Dow closed up 245 points at 13,292. The S&P 500 was 29 points 1,432. The Nasdaq Composite was up 67 points at 3,136.
August nonfarm payrolls
While investors kept the positive momentum early Friday morning, markets soon pared gains after the Labor Department released its August jobs report. Total nonfarm payrolls increased by 96,000, lower than the 130,000 economists had expected, according to Briefing.com. The Labor Department also revised down job growth for the past two months by 41,000. In July, it revised job growth down to 141,000.
The unemployment rate declined to 8.1% in August from 8.3% in the previous month, but the drop was due to a smaller labor force. Economists had forecast the unemployment rate to hold steady at 8.3%.
The lackluster jobs report could prompt the Federal Reserve to act. As Fed Chairman Ben Bernanke said just last week, "stagnation of the labor market in particular is a grave concern." Bernanke has said he doesn't rule out more quantitative easing, and the tepid job growth could be seen as the driver for the Fed to act.
Asian markets closed mostly higher and European markets were also higher after ECB President Mario Draghi outlined an unlimited bond-buying program to lower struggling eurozone countries' borrowing cost.
Meanwhile, economic data Friday also boosted sentiment. German industrial production unexpectedly rose in July by 1.3%, much better that what economists had expected. Also, German exports and imports edged up 0.5% and 0.9%, respectively, in July. These are indications that Europe's largest economy is weathering the debt crisis.
U.K. industrial production also surged in July by the most in 25 years. Production rose 2.9%, the most since February 1987 and better than expectations. The U.K. surge indicates some strength in the economy after it shrank 0.5% in the second quarter, partly because of the jubilee holiday. It could mean the U.K. economy is slowly crawling out of the recession.
Stocks to watch
Intel (INTC) shares fell after the chip-maker lowered its third-quarter revenue guidance because of weaker-than-expected demand in a challenging macroeconomic environment. Intel now expects revenue to be $13.2 billion, plus or minus $300 million, compared with its previous expectation of revenue of between $13.8 billion and $14.8 billion.
Kroger (KR), the biggest U.S. supermarket operator, posted a slightly lower quarterly profit compared to last year's period, but it was nonetheless better-than-expected. The company also slightly raised its forecast for the full year, Reuters reported.
News Corp. (NWSA), the media company controlled by Rupert Murdoch, agreed to buy Consolidated Media Holdings for A$1.94 billion ($2 billion) to boost its stake in Australian pay television. Billionaire Kerry Stokes weighed making a counter-offer. News Corp. agreed to pay A$3.45 a share and investors will also get a six Australian cents a share dividend from the target, Sydney-based Consolidated said in a filing.
Gunmaker Smith & Wesson Holding (SWHC) raised its full-year sales forecast as it expects to continue tapping growing demand for guns in the United States and boosting production capacity.
Dell (DELL) declared its first cash dividend. Stockholders of record as of Oct. 1 will receive 8 cents a share, payable on Oct. 22, the company said.
Kraft Foods (KFT) warned that 2013 earnings for its standalone international snack company would likely be lower than some forecasts because of unfavorable foreign exchange rates.
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