Wall Street Indexes Lower on Weak Payroll Data

Nichole Harper
05 Sep, 2014
New York City

Stocks on Wall Street declined after August payroll data was lower than expected and unemployment rate declined to 6.1% from 6.2%. Family Dollar rejected revised bid by Dollar General. Tesla Motors selected Nevada for its $5 billion lithium battery plant.

[R]10:45 AM New York – Stocks on Wall Street declined after August payroll data was lower than expected and unemployment rate declined to 6.1% from 6.2%. Family Dollar rejected revised bid by Dollar General. Tesla Motors selected Nevada for its $5 billion lithium battery plant.[/R]

Stocks struggled on Wall Street after August monthly payroll data was lower than expected and crude oil prices slipped.

U.S. employers, government and private, added 142,000 jobs in August, a surprise decline after adding average 200,000 jobs every month for six months in a row, the Labor Department said today.

The first estimates are generally revised two more times and the August data is likely to be revised higher.

The unemployment rate declined to 6.1% in the month from 6.2% in July, the government agency said according to a separate survey.

The six month long stretch of more than 200,000 monthly job addition was the longest since 1997.

In August, federal, state and local governments added 8,000 jobs and private sector added 134,000 driven by business services and healthcare.

The agency also revised June employment data higher to 267,000 from 298,000 and July’s data to 212,000 from 209,000.

The average work week was unchanged at 34.5 hours and was steady for the sixth straight month in a row and hourly earnings increased 6 cents to $24.35, an increase of 2.1% from a year ago.

The underemployment rate declined to 12% from 12.2% and the broader measure of unemployment counts unemployed, discouraged workers who are no longer looking for work and part-time employees who prefer full-time work.

The long-term unemployed workers declined by 192,000 to 3 million and still make about 31% of all people looking for work.

S&P 500 index decreased 1.44 to 1,996.22 and the Nasdaq Composite Index added 0.04 to 4,562.36.

U.S. Movers

Tesla Motors Inc ((TSLA)) declined 4% to $274.65 and the electric car maker selected Nevada over California and Texas to locate its lithium battery plant.

The plant is expected to require $5 billion of investment and is likely to employ as many 6,000 full-time workers when ready in 2017.

The batteries are expected to be used in next line of electric cars that are expected to sell at $38,000.

European Markets

German factory production rebounded in July, lifting hopes for the economic growth in the third quarter for the Europe’s largest economy.

Production increased 1.9% in July from the revised 0.4% in June, the Federal Statistical Office said today.

The latest data followed the Thursday release of factory orders increase by 4.6% in July.

German economy shrank 0.2% in the second quarter and the economy in 2014 is still expected to grow between 1% and 2%.

In European trading, FTSE 100 index declined 0.5% to 6,844.22 and CAC 40 index declined 0.3% to 4,482.88. DAX 30 index gained 0.14% to 9,737.46.

Asian Markets

Stocks in Tokyo closed lower after weak resource stocks overshadowed the surprise ECB rate cut announcement and the yen weakened to a four-year low.

The European Central Bank unexpectedly cut its lending rate by 10 basis points to 0.05% and deposit rate to minus 0.2%.

The central bank also signaled willingness to purchase as much as $1 trillion in sovereign bonds to stimulate the halting economic recovery across the euro zone, despite still resistance from German lawmakers and central bankers.

The positive news was overshadowed by the persistent weakness in resource stocks. Resource and trading companies declined on Friday and in the week after iron ore prices dropped to a five-year low.

The Nikkei 225 Stock Average slid 7.50 to 15,668.68 and the broader Topix index fell 3.18 to 1,293.21. For the week, Nikkei 225 jumped 1.6%.

The Sensex Index fell 59.23 or 0.2% to close at 27,026.70 The CNX Nifty slid 9.10 to 8,086.85. For the week, Sensex gained 1.4%.

Infosys Ltd increased 0.6% to Rs 3,730.30 after the software exporter was selected by the U.K.-based BP Plc to provide application support and development.