Payrolls Data Support Indexes on Wall Street and in Europe

Nichole Harper
06 Feb, 2015
New York City

Market indexes on Wall Street pulled back from record high and jobless rate to 5.6% after more people began to look for work and employers added net new jobs of 257,000 extending the job one-year long jobs market expansion.

[R]3:00 PM New York – Market indexes on Wall Street pulled back from record high and jobless rate to 5.6% after more people began to look for work and employers added net new jobs of 257,000 extending the job one-year long jobs market expansion.[/R]

U.S. stock indexes pulled after reaching towards record high and investors digested latest earnings and jobs data.

Employers at all levels added net 257,000 jobs in January following upwardly revised November and December data. Payrolls in the last two months were revised higher by a total of 147,000.

In all of 2014, the U.S. economy added on average of 260,000 net jobs a month.

In a separate report, the Labor Department said today that the jobless rate edged up 5.7%, from 5.6% as more people returned to job market in search of employment.

Average hourly earnings increased only 0.5% in January, a substantial slowdown after running at 2% increase in the previous two months.

The jobless rate is determined by using a separate survey of households and monthly jobs data is calculated using the survey of establishments.

Most economists sounded optimistic on the quality of jobs data but January month remains difficult to assess employment picture.

Transient weather and seasonal layoff at retail stores after the burst in hiring during the holiday period makes it difficult to gauge overall jobs picture across the nation. In addition, statistical smoothening also plays a part in determining the assessment that is closer to economic reality.

U.S. Movers

Harris Corporation ((HRS)) soared 7.9% or $5.53 to $75.02 after the satellite and other communications equipment maker reported revenue in the second-quarter ending in December slid 0.8% to $1.21 billion form a year ago period.

Net income in the quarter rose 2.4% to $139.5 million or $1.32 a diluted share compared to $136.2 million or $1.26 from the same quarter last year.

Separately, today the company agreed to acquire defense contractor Exelis Inc for cash and stock valuing the company at $23.75 per share or about $4.75 billion.

Shareholders of Exelis will receive $16.625 in cash and 0.1025 of a share of Harris amounted to about $23.75 a share.

The transaction is expected to close in June 2015.

Shares of Exelis Inc surged 35.1% to $23.92.

LinkedIn Corp ((LNKD)) surged 14.6% or $34.72 to $272.69 after the professional network service provider said revenues in the fourth-quarter ending in December soared 43.9% to $643.4 million from a year ago period.

Net income in the quarter tumbled 20.9% to $2.99 million or 2 cents a diluted share compared to $3.8 million or 3 cents from the same quarter last year.

Twitter Inc ((TWTR)) soared 16.3% or $6.70 to $47.96 after the micro-blogging service provider reported revenues in the fourth-quarter ending in December climbed 97.4% to $479.1 million from a year ago period.

Net loss in the quarter narrowed to $125.4 million or 20 cents a diluted share compared to $511.5 million or $1.41 from the same quarter last year.

For the first-quarter, the company forecasted revenues between $440 million and $450 million and adjusted EBITDA to be in the range of $89 million to $94 million.

For the year, Twitter forecasted revenues in the range of $2.3 billion to $2.35 billion and adjusted EBITDA between of $550 million to $575 million.

European Markets

Stocks in Europe gained for the fifth day in a row and the meeting between leaders of Germany and France and Russia failed to resolve Ukraine crisis in Moscow.

Russian President Vladimir V Putin disagreed to strong message from German Chancellor Angela Merkel and French President Francois Hollande to respect the Ukrainian border as defined before the crisis erupted in the eastern region.

Investors focused on the latest jobs data from the U.S. and bid up stocks after the release of the report.

In London trading, FTSE 100 index edged down 0.94 to 6,864.99 and in Frankfurt the DAX index fell 0.6% or 59.96 to 10,845.45.

In Paris, CAC 40 index slid 0.2% or 7.59 to 4,695.71.

Statoil ASA rose 0.4% to 140.90 kronor after the Norway-based energy group said total revenues in the fourth-quarter ending in December declined 2.9% to 152.6 billion kronor from 157.1 billion kronor.

Net in the quarter swung to a loss from a year ago to 8.9 billion kronor compared to profit of 14.8 billion kronor and loss per share swung to a 2.80 kronor from earnings per share of 4.64 kronor.

The Norway controlled energy company enlarged the scope of cost cutting and also halted dividend growth after the recent plunge in oil prices.

The board of directors proposed a 1.80 kronor dividend for the quarter and 7.20 kronor per share for the year.

Sunrise Communications AG soared 7% after the second-largest Swiss wireless operator raised 2 billion Swiss francs in the largest public offering in Zurich nearly in a decade.

Tate & Lyle Plc tumbled 12.1% to 584.30 pence after the U.K.-based food and beverage ingredient provider forecasted group profits for the year to be lower than estimated £230 million to £245 million range in September.

As of December, net debt climbed to £466 million from £383 million in September quarter.

Asian Markets

Stocks in Tokyo closed higher and Topix index closed up for the third week in a row after corporate earnings were weak but still ahead of estimates.

Companies releasing earnings so far in the quarter have shown slight improvement in the outlook and benefitted from the weakening yen. However the lift in earnings from the currency depreciation has not been as strong as many analysts had estimated.

Nikon and Suzuki fell more than 5% after two companies estimated sharply lower annual net income despite the recent weakness in the yen.

The Nikkei 225 Stock Average increased 143.88 or 0.8% to 17,648.50 and the broader Topix index gained 7.08 to 1,417.19.

For the week, Nikkei 225 edged down 0.2%.

The yen closed edged up at 117.34 against one dollar.


Nikon Corporation plunged 5.5% to 1,467 after the digital camera maker reported net sales in the nine-month period ending in December declined 15.7% to 617.82 billion yen from 732.48 billion yen a year ago period.

Net income in the quarter tumbled 55.4% to 16.73 billion yen compared to 37.51 billion yen and diluted earnings per share dropped to 42.10 yen from 94.41 yen in the same period a year ago.

The camera maker forecasted net sales for the year to decrease 4.4% to 860 billion yen from earlier estimate of 900 billion yen and net income to plummet 47.4% 20 billion yen compared to previous guidance of 38 billion yen.

Stocks declined for the sixth day in a row in Mumbai and the Sensex dropped the most in a week in two months.

The selling in stocks were led by auto and banking sector stocks and market indexes suffered worst weekly loss in eight months after banks reported rising bad loans reserves.

Indian rupee closed at 61.69 against one dollar.

The Sensex Index slipped 133.06 or 0.5% to close at 28,717.91. The CNX Nifty decreased 50.65 or 0.6% to 8,661.05.

For the week, Sensex declined 1.6% and CNX Nifty dropped 1.7%.