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.

By Melly Alazraki Sep 7, 2012 9:27AM
stock marketUpdated at 12:32 p.m. ET

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 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.
European data encouraging
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.

Lululemon Athletica (LULU) reported a higher quarterly profit that was inline with analyst estimates. The yoga apparel retailer alsoboosted its outlook on Friday.

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.

Apple (AAPL) has reduced its orders for memory chips for its new iPhone from its main supplier and competitor Samsung Electronic, a source told Reuters.

Mylan (MYL) said it settled with Pfizer (PFE) on a lawsuit that accused it of infringing patents on overactive bladder drug Detrol LA.

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.

Sep 7, 2012 9:54AM
368k people dropped out of the workforce, which is why the UE rate went down even though only 96k jobs were created.  Labor participation rate is at lowest level since 1981.
Sep 7, 2012 11:42AM

I heard no mention of an obama plan last night

just more empty rhetoric
Sep 7, 2012 9:40AM

The job creators (Small businesses)are on the sidelines. Why? The same reason as 3 years ago. UNCERTAINTY. Not the economy side. We have dealt with that for ever. It is uncertainty in employee costs (healthcare, regulations, inflation driving higher interest rates, taxes and what we will have left to reinvest.and the ability to get a bank loan to grow. Small business America is still waiting. Our company isn't hiring. When busy, everyone is working overtime (at 1.5 times pay...9% more $$ this year). The money we make is paying down debt and investing on only sure automation...

We will review our strategy again in November.


The total economic collapse of the west has just now been sealed with Europe now in the money printing business.


The ride to the bottom is now going into hyper drive folks. Buckle up it's going to be a rough ride to the bottom.

Sep 7, 2012 10:06AM

Recession over in 2009 -


Average jobs created per month in 2011  153,000

Average jobs created per month in 2012   139,000 (thru August)


Actual jobs created in June & July revised DOWN by 41,000


Reminds me of the weekly unemploymnet first time claims.  Last week's #'s were revised upward by 3,000, and this is a weekly norm.


AND - again - how many of these are full time w/ benefits and at least $50,000 a year.


This will not help us out of our housing debacle




Yep at 200,000 new jobs a month needed to merely keep the young people employed we are still losing jobs at 96,000 new jobs a month.


Pretty much more and more people are falling off the unemployment rolls or are finding they do not qualify for unemployment benefits when they apply.


WE ARE STILL CAUGHT IN A DEATH SPIRAL OF LOST JOBS AND an ever weaker and weaker economy.


Yep the Europeans going into the same debt trap that has caught Japan and the USA is not something that we should be hoping for.


Instead of dealing with the problem and letting those countries in Europe go bankrupt and then get on with their lives like Iceland has already done. The ECB has doomed Europe into a debt trap that will kill it's economy.


Pretty much the China plan for world domination is slightly ahead of schedule they thought this would happen in 2020 but it seems like the collapse of the western economies is going to be sooner 2014 rather than later 2020.


Wonder how much the leaders of Japan and USA and Europe have been paid to trash their countries???

Sep 7, 2012 11:50AM
try these  #s      23,100,000     unemployed

                              844,000  dropped from the workforce

                          change that has no PLAN AND NO HOPE
Sep 7, 2012 9:38AM
once again employment drops while job growth is slow......  certainly a contradiction without a contraction? 
Sep 7, 2012 12:04PM

The White House just made this announcement - The jobs market is going in the right direction.  Sounds like there were way to many beers drunk at last nights beer summit.


Again, it is not just the weak numbers, but are these jobs people can build a career on or raise a family, purchase cars, appliances, houses, FOOD, clothing, etc?

Sep 7, 2012 10:11AM

The numbers do not impress on any level. The majority of the job increases according to this report are service sector jobs.{Can you say "You want fries with that".}


It's close enough to the presidential election for Ben Dover to roll out a worthless QE3 to dump in the hog trough for the swine to snarf up and show about a 2 month rise in the markets only.


I'm surprised Ol'Leroy wasn't on the stage last night flopping around sobbing" I don't know what to do". It all Bush's fault."

Sep 7, 2012 10:38AM
There will be a recovery 01/20/2013, as soon as Obozo leaves office...   "57 States" is economically clueless, CORRUPT, lazy and worst of all a follower of Marx....

There can be no economic recovery while this man is in office...

Yep as we lose our technological advantage by not investing in high tech and the sciences most of our colleges have turned into football money making machines that could care less about advancement of knowledge and more about how big a football stadium they can build. College Presidents are selected now not on their ability to push forward knowledge but their ability to secure government loans to fund the huge salaries of their expanded executive branch. More than half the revenues of colleges go to the salaries of a handful of people at the top. Who says only Wall Street bankers shoudl make $250,000,000 a year??


China on the other hand has already passed us with their thousands of high tech development zones



In recent years there has been increasing concern with respect to the People Republic of

China’s (PRC) intensified activities and efforts towards selected high technology

industries (“Sunrise”) sectors - namely Biotechnology, Nanotechnology, and Electro-

Optics of the PRC science and technology (S&T) industries. Issues driving interest in

these areas are numerous and varied.

This report attempts to shed light and insight on specific issues addressing potential

implications to U.S. military, economic, and national security as China continues its

accelerative pace in securing and developing advanced technologies. In light of ongoing

reconfigurations of the economic landscape on a worldwide scale, as a result of

unprecedented constraints and collapses of financial markets and credit liquidity,

insolvency of numerous businesses and operations, and a severe loss of collective

confidence, though earlier priorities of overseas trends may have been adjusted

accordingly, they still remain on the forefront. National concern in the United States has

arisen that the country’s once unparalleled position as leader in science and technology

has been eroded by a number of factors. These external and internal factors include the

globalization of S&T, the rise and development of science centers and technology zones

in developing countries such as China and India, and the perception that the U.S. is not

investing enough in its future given the existing pressures on its complex and

interconnected S&T enterprise. It has been well documented and recorded that a loss of

this leadership could potentially hurt the U.S. economy, living standards, and national

security. Some would even argue that we are witness of the beginning of that erosion

accelerated by the existing financial and economic upheaval.

The U.S. China Economic and Security Review Commission has requested NSD Bio

Group, LLC to produce a one-time report addressing particular “Sunrise” sectors of the

PRC, recognized as key drivers contributing to China’s widening economic, financial,

and national security development. The selected geographic areas covered in this report,

reflects a desire to present a fair representation of the state of R&D on these specific

sectors within the PRC in both well known and more established areas (Beijing,

Shanghai, and Tianjin), as well as in lesser known, but emerging hubs of S&T activity

(Harbin and Kunming) to the Commission.

This report draws on and adds to the many papers, reports, public hearings, and

testimonies previously submitted and witnessed by the Commission


Sep 7, 2012 11:05AM

Every month or two we have the same discussion or SNIDE REMARKS about the jobs situation...And then who you are going to blame it on, irregardless of any truths in the matter..

First off, most probably don't want to accept the possibility of the "new normal" being 4-6% unemployment, no matter what Capitalism or the Government does; UNLESS the Gov. wants to put everyone back on chain gangs, doing menial work to earn their UE and Foodstamps or Medical care.?

Of course, I personally believe that some work incentives should be applied or Demanded, before giving a populace unlimited amounts of welfare over a long period of time...

So maybe work gangs...WPA or CCC type of associations are needed.?

Free for Free has never really worked, and long term case studies,would probably bear that out.?



Sep 7, 2012 10:58AM
Obama  Quote

Heal America Heal         oh well i gave it my best shot       lol
Sep 7, 2012 11:46AM
1946                Ryans budget was endorsed by the democrats    i guess we cannot have a bi-partisan plan 

those dems were told by their masters to STFU
Sep 7, 2012 10:45AM
If there should be any investIgations of earnings it should be W/S and how they earn their money.  I would trust Mitt Romney and his earnings more then I would trust anyone who works or is associated with Wall Street or any world market to be honest!!!!
Sep 7, 2012 11:09AM

are you afraid of RYAN ?

sure sounds like it  lol
Sep 7, 2012 11:49AM

Tumble Brain says - Ryan quote " granny blood is yummy!"


and you think your weirdometer has any meaning to a sane person..... What an idiot.

Sep 7, 2012 10:59AM

 I'm sure glad I bought based on the ADP numbers!  I am starting the Coach321 employment report next month.  No surveys or research but I will magically predict unemployment and leak the number to all of you before the opening every day.  Then we can trade like the big boys.  


I don't see BB doing another QE with the market at these levels.  At this point it's kind of like using your last bullet.  It's more of a psychological ray of hope than any real protection.  Why use it and destroy all hope? 


You can hint at it forever though and that's all the market needs.  There's plenty of money out there already.





Sep 7, 2012 10:44AM
Get ready for FRAUD STREET'S crash next week after the FOMC meeting and the ESM ruling ! TAKE YOUR MONEY AND RUN !!
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