U.S. Employment Data Lifts Market Sentiment, Jobless Rate at 5.8%

Nichole Harper
05 Dec, 2014
New York City

Market indexes on Wall Street trimmed gains and investors took an optimistic view of the latest monthly jobs data. Employers at all levels added 321,000 jobs and jobless, the most since June 2012 and jobless rate held at 5.8%. U.S. trade deficit also narrowed. S&P lowered its view on Italian debt.

[R]3:30 PM New York – Market indexes on Wall Street trimmed gains and investors took an optimistic view of the latest monthly jobs data. Employers at all levels added 321,000 jobs and jobless, the most since June 2012 and jobless rate held at 5.8%. U.S. trade deficit also narrowed. S&P lowered its view on Italian government debt.[/R]

Stocks and market indexes pared gains after a steady rise since the opening and crude oil and precious metals extended losses.

Investors bid up stocks after the U.S. government data showed better than expected increase in monthly jobs data in November and trade deficit narrowed in October.

The continued fall in energy prices also depressed energy complex stocks in the U.S. and European trading. Indexes also pared gains after Standard and Poor’s lowered its view on Italian credit and cited rising government debt.

On Wall Street trading, Tollbooth Index edged down 0.01% or 0.65 to 10,016.77.

S&P 500 index rose 4.91 or 0.2% to 2,076.83 and the Nasdaq Composite Index gained 16.50 or 0.3% to 4,785.79.

New orders for manufactured goods in October dropped $3.3 billion or 0.7% to $496.6 billion, followed by 0.5% decrease in September, Department of Commerce said today.

In a separate report, the department said trade deficit in October narrowed to $43.4 billion from the revised $43.6 billion in September.

U.S. non-farm payroll employment in November increased 321,000 beating the estimates of 240,000 increase set my many economist in New York. The monthly jobs increase was the best since January 2012.

The increase in November was larger than the gain of 243,000 in October, Labor Department report showed today in Washington.

In a separate report the department said the November unemployment rate held at 5.8% from October and average hourly earnings increased 0.4%, the largest increase since June of last year.

U.S. Movers

Big Lots, Inc ((BIG)), the discount store operator said net sales in the third-quarter ending on November 1 edged up 0.9% to $1.11 billion from a year ago period. Comparable store sales in the quarter increased 1.4%.

Net loss in the quarter narrowed to $3.44 million or 6 cents a diluted share compared to $9.52 million or 17 cents from a same quarter last year.

Ulta Salon, Cosmetics & Fragrance, Inc ((ULTA)), the beauty products retailer reported net sales in the third-quarter ending on November 1 climbed 20.5% to $745.7 billion from a year ago period.

Comparable store sales in the quarter soared 9.5%, E-commerce comparable sales surged 46.7% and comparable salon sales jumped 10.1%.

Net income in the quarter advanced 30.1% to $59.1 million or 91 cents a diluted share compared to $45.4 million or 70 cents from a same quarter last year.

European Markets

In London trading, FTSE 100 index increased 0.8% or 51.39 to 6,730.76 and in Frankfurt the DAX index climbed 1.8% or 166.53 to 10,017.88.

In Paris, CAC 40 index jumped 1.8% or 77.05 to 4,400.94.

In the European corporate news, Balfour Beatty rejected a £1 billion offer from John Laing Infrastructure. Berkeley Group profit surged 85% to £242 million.

Glaxo abandoned its plan to sell a portfolio of medicines. Songbird rejected £2.6 billion revised takeover proposal from Qatar Investment and Brookfield.

Balfour Beatty Plc, the U.K.-based infrastructure developer rejected a £1 billion or $1.6 billion offer from John Laing Infrastructure Fund for its public-private partnership assets as “significantly short of its own view of its value.”

GlaxoSmithKline Plc, the U.K.-based healthcare company abandoned its plan to sell its some of old medicines with lost patent protection in North America and Europe after it received considerable offers from world’s largest private equity groups.

Songbird Estates Plc, the U.K.-based property investor rejected an increased takeover proposal from Qatar Investment Authority and Brookfield Property Partners LP of £2.6 billion or $4.07 billion and said offer still undervalues the company.

Asian Markets

Japanese stocks and market indexes extended gains for the sixth day in a row and the Topix extended seven-year high. The yen dropped below 120 mark and economists and brokers held out for 125 against the U.S. dollar target.

Stocks and market indexes in Tokyo closed higher after the yen weakened and dropped below 120 mark.

Shares in Tokyo traded higher for the sixth day in a row and the Topix index followed by financial institutions extended a seven-year high mark.

Investors are still digesting the effect of weaker yen and lower oil prices on corporate earnings, however smaller companies dependent of imported goods are facing sharp fall in profitability.

Isuzu Glass Co, eighty year old glass maker, filed for bankruptcy protection after the maker of optical filter glass in Osaka on the rising costs of imported products from China and customers in Japan requesting lower prices.

Forty-two companies shut down or filed for bankruptcy protection in November and total of 301 companies have failed in the first eleven months of the year that are the casualty of the weaker currency, according to the Teikoku Databank Ltd.

The Cabinet Office announced preliminary data showed Japan''s leading index declined to 104 in October from 105.6 in September, the lowest since January 2013.

The Nikkei 225 Stock Average gained 33.24 or 0.2% to 17,920.45 and the broader Topix index rose 5.07 to 1,445.67.

For the week, Nikkei 225 climbed 2.6%.

The yen weakened 0.5% to 120.41 against one dollar.

In Mumbai trading, the Sensex Index slipped 104.72 or 0.4% to close at 28,458.10. The CNX Nifty fell 26.10 or 0.3% to 8,538.30.

For the week, Sensex declined 0.9% and CNX Nifty dropped 0.7%.

Axis Bank Limited, the private sector lender sold 10-year infrastructure bonds to raised Rs 5,705 crore.

Dena Bank, the financial service provider plans to sell bad loans of Rs 500 crore to asset reconstruction companies in fourth quarter.

Reliance Industries Limited, the conglomerate signed a deal with Mexico-based Petroleos Mexicanos for cooperate in upstream oil and gas production.