Severe Cold Dampened U.S. Jobs Data, Stocks Fluctuate

Nichole Harper
10 Jan, 2014
New York City

U.S. stocks traded sideways and employers at all levels added fewer than expected 74,000 jobs in December. Average monthly payroll increase of 182,000 matched previous two years. Jobless rate declined to 6.7%. Sears Holdings plunges after dismal holiday performance.

[R]1:50 PM New York – U.S. stocks traded sideways and employers at all levels added fewer than expected 74,000 jobs in December. Average monthly payroll increase of 182,000 matched previous two years. Jobless rate declined to 6.7%. Sears Holdings plunges after dismal holiday performance.[/R]

U.S. indexes opened higher but quickly descended into negative zone and recovered to flat line in early afternoon trading.

S&P 500 index declined 2.04 to 1,836.09 and the Nasdaq Composite Index eased 4.32 to 4,151.88.

Immediate month delivery futures of gold added $16.12 to $1,245.10 per ounce and silver gained 51 cents to $20.20 per ounce. Copper increased 4.65 cents to 334.55 cents an ounce.

Smaller Increase in Payrolls

Private sector and government agencies at all levels added 74,000 jobs in December, the Labor Department said today.

Unemployment rate declined to 6.7% in the month from 7% in November as labor participation dropped to 36-year low of 62.8%.

Employers in previous four months added 214,000 jobs but tough weather conditions played a role fewer hiring in the month.

Construction industry, dependent of weather conditions, cut jobs by 16,000, the largest decline in 20 months. Health care sector cut 6,000 positions, the first monthly cut in jobs in the sector in 10 years.

Government continued its workforce reduction and cut 13,000 jobs. However, private sector manufacturing added 9,000, fifth monthly increase in a row but at a substantially lower pace than 31,000 in November.

Retailers added 55,000 jobs in the month.

European Markers

In London trading, FTSE 100 index jumped 0.8% or 53.67 to 6,745 and in Frankfurt the DAX index gained 0.5% or 45.88 to 9,467.

In Paris, CAC 40 index climbed 0.5% or 22.07 to 4,247.

Brent Crude Oil traded 70 cents higher to $107.12.

U.S. Stocks in Review

Alcoa Inc ((AA)) plunged 5.1% or 54 cents to $10.15 after the aluminum producer reported revenue in the fourth quarter ending in December dropped 5.2% to $5.59 billion.

Net income in the quarter swung to a loss $2.34 billion or $2.19 per diluted share compared to a net income of $242 million or 21 cents per share year ago earlier.

Revenue for the year dropped to $23 billion from $23.7 billion a year ago. The company reduced its total debt from $8.3 billion in 2013 to $8.8 billion in 2012.

Alcoa posted a steep quarterly $1.7 billion impairment charge and said its venture with Alumina will pay $400 million to resolve bribery charges in Bahrain.

Alcoa pleaded guilty to a criminal charge and agreed to pay $384 million in penalties to end investigations by the Department of Justice and the Securities and Exchange Commission regarding bribery allegations made by a Bahraini for certain legacy alumina contracts with Aluminium Bahrain (Alba).

Five Below Inc ((FIVE)) declined 6.6% or $2.87 to $40.72 after the retailer said net sales for nine week period ending on January 4 climbed 25.4% to $185.3 million while comparable store sales for this period decreased by 0.5%.

The company expects net sales for the fourth quarter in the range of $208 million to $210 million and comparable store sales to drop between -1.5% and -0.5% and net income in the range of $23.3 million to $24.3 million with diluted earnings per share between 43 cents and to 45 cents.

Sears Holdings Corp tumbled 14.5% or $6.14 to $6.20 to $36.41 after the specialty retailer expects a hefty loss in the fourth quarter and full-year following a disappointing holiday season and expects to report a fourth-quarter adjusted loss of $2.01 to $2.98.

The retailer forecasted adjusted loss for the year between $811 million and $914 million or $7.64 to $8.61 per share.

Synnex Corporation ((SNX)) plummeted 10.8% or $7.04 to $58.03 after the computer peripherals retailer reported revenue in the fourth-quarter ending in November climbed 10.6% to $3.06 billion.

Net income in the quarter fell 4.9% to $41.5 million or $1.10 a diluted share compared to $43.6 million or $1.16 per share year ago earlier.