U.S. Indexes Surge After January Jobs Report

Nichole Harper
01 Feb, 2013
New York City

Stocks and indexes traded higher after employers added 157,000 jobs in January. Job additions data in November and December were revised higher and employers added 181,000 jobs a month in 2012.

[R]10:30 AM New York – Stocks and indexes traded higher after employers added 157,000 jobs in January. Job additions data in November and December were revised higher and employers added 181,000 jobs a month in 2012.[/R]

Stocks in early trading shot up after the Labor Department revised recent job growth higher than initially estimated.

The S&P 500 index increased 0.8% and the Nasdaq Composite Index gained 0.8%.

Employment Revised Higher

U.S. employers added 157,000 jobs in January and hiring data were revised for November and December. Unemployment rate increased to 7.9% from 7.8% in December.

The department uses survey of businesses to calculate jobs growth and household survey to determine unemployment rate.

After the two months data revision, employers added 181,000 jobs a month in 2012 and 2011, higher than previously estimated 150,000.

One significant change in the employment market is the construction industry contribution. Contractors added 28,000 jobs in January and nearly 100,000 jobs in the past four months, reflecting a broader recovery in the housing and construction market.

International Markets

European markets rebounded after a 2-day slump and the euro reached a new 14-month high after a private survey indicated manufacturing contracted at the slowest pace in January in 11 months.

Asian markets traded higher after two surveys in China reported an expansion in manufacturing at different rates. The official Chinese estimate suggested a smaller increase in manufacturing in January and HSBC survey was revised in the second reading to show faster expansion.

The weaker yen lifted Japanese indexes for the 12th week in a row. The yen dropped to a low last seen in June 2010.

Markets in Mumbai fell sharply after the largest wireless telecom Bharti Airtel reported earnings that missed expectations by a wide margin. The second largest airline is in discussion to sell 24% stake to Abu Dhabi based Etihad as early as this weekend.

Markets in Australia extended rally and jumped to a new high despite the Standard & Poor’s raising a warning that the country is at a “intermediate risk” from the slowdown in China.

Stocks in Review

Chevron Corporation ((CVX)) gained 51 cents to $115.66 after the oil and gas explorer reported sales in the fourth quarter ending in December rose 1% to $60.55 billion from $59.99 billion in the same period of last year. Net income in the quarter soared 41% to $7.24 billion or $3.70 per diluted share compared to $5.12 billion or $2.58 a share a year ago.

Exxon Mobil Corporation ((XOM)) slid 48 cents to $89.49 after the petrochemical company reported sales in the fourth quarter ending in December declined 5% to $115.17 billion from $121.61 billion in the same period of last year. Net income in the quarter climbed 6% to $9.95 billion or $2.20 per diluted share compared to $9.40 billion or $1.97 a share a year ago.

Ingersoll-Rand plc ((IR)) gained 48 cents to $51.99 after the Ireland based diversified company reported net sales in the fourth quarter ending in December slid 1% to $3.47 billion from $3.51 billion in the same period of last year. Net income in the quarter slipped 3% to $235.6 million or 78 cents per diluted share compared to $242.2 million or 76 cents a share a year ago.

For 2013, the company expects revenue in the range of $14.2 billion to $14.6 billion and earnings per share from continuing operations are between $3.45 and $3.65.

For the first quarter, revenues are in the range of $3.1 billion to $3.2 billion and earnings per share from continuing operations are between 35 cents and 40 cents.

Legg Mason, Inc. ((LM)) dropped 2.3% or 64 cents to $27.01 after the investment manager said sales in the third quarter ending in December edged up to $673.9 million from $627 million in the same period of last year. Net loss in the quarter swung to $453.9 million or $3.45 per diluted share compared to net income of $28.1 million or 20 cents a share a year ago earlier.

Life Time Fitness, Inc. ((LTM)) plunged 19.3% or $9.80 to $40.93 after the fitness and spa center operator said revenue are estimated for the fourth quarter in the range of $273 million to $275 million and net income of $22 million to 23.5 million and diluted earnings per share of 53 cents to 56 cents.

For the year 2012, revenues are estimated between $1.13 billion and $1.13 billion and net income in the range of $110 million to $111.5 million and diluted earnings per share of $2.63 to $2.66.

The company previously provided revenue guidance for 2012 of $1.127 billion and $1.137 billion and net income of $114.5 million to $116 million and diluted earnings per share of $2.73 to 2.76.

Merck & Co., Inc. ((MRK)) declined 3.5% or $1.52 to $41.70 after the health care company reported sales in the fourth quarter ending in December dropped 4.5% to $11.74 billion from $12.29 billion in the same period of last year. Net income in the quarter declined 7% to $1.40 billion or 46 cents per diluted share compared to $1.51 billion or 49 cents a share a year ago.

Merck said pharmaceutical sales in the quarter declined 6% to $10.1 billion and sales from animal health segment grew 3% to $898 million. Consumer care segment sales jumped 9% to $395 million.

Merck expects full year revenues to be near 2012 levels and earnings per share in the range of $2.03 to $2.26.