MarketsTumble on Lack of Job growth and Oil Rise

123jump.com Staff
30 Nov, -0001
New York City

Less-than-the half rise in non-farm payroll for the previous week confused the market and oil price rise and end of the week has put several trades on the side lines. The market was on the defensive on almost all sectors as trading volume remain below average.

Stock declined that started in the morning continued for the rest of the day. Lower employment creation and higher oil prices dampened investors’ appetite for shares.

Non-farm employment edged up by 78,000 in May following a much larger increase in April, and the unemployment rate was essentially unchanged at 5.1 percent, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. Pay- roll employment continued to grow over the month in health care and construction, but was little changed in the other major industry sectors.

Both the number of unemployed persons, 7.6 million, and the unemployment rate, 5.1 percent, were essentially unchanged in May. The jobless rate was down from 5.6 percent a year earlier.

Over the month, the unemployment rates for adult men (4.4 percent), adult women (4.6 percent), teenagers (17.9 per-cent), whites (4.4 percent), blacks (10.1 percent), and Hispanics or Latinos (6.0 percent) showed little or no change. The jobless rate for Asians was 3.9 percent, not seasonally adjusted.

Oil prices and shares of oil companies moved higher on the projections of higher domestic energy demand in the fourth quarter. July crude oil futures traded up $1.40 at $55.70 per barrel.

Shares of Apple closed lower $1.80 or 4.5% lower on the news that the recent iPod battery related suite settlement may cost up to $100 million. Internet report on iPod shuffle products inventory in the retail channel also prompted worries on the revenue and earnings forecast for the current quarter.

Build-A-Bear Company lowered its second quarter and fiscal year outlook on lower sales forecast. The company revised 2Q earnings forecast to 12 cents to 14 cents from 23 cents to 25 cents. The company registered its shares through IPO in November 2004. The stock fell 21% at the closing.

Grief Inc., maker of container and containerboard, reported 2Q earnings of adjusted earnings of 81 cents twice compared to a quarter year ago. However the stock fell $10 or 14% on the cautious outlook for the next quarter.

Harvest Natural Resources said that it is withdrawing its financial forecast for the year. The company has suspended its drilling program in Venezuela and has yet to be paid by PvdsA, the Venezuelan oil company for the 1Q oil deliveries. The stock fell little more than a dollar or fell 11.3% at the close on heavy volume.

Blue Coat Systems, network security appliance maker, reported 4Q profit of 21 cents vs. 11 cents a year ago on 30% higher revenue to $28.4 million. The stock jumped up $5.20 at close.

Smithfiled Foods, meat processor, reported 4Q profit of 76 cents vs. $1.09 a year ago on one time gain of discontinued operations and legal settlement on 16% jump in revenue to $2.92 billion. For the full year the company earned $2.64 or $2.03 excluding gains. The company does not see weakness in pork prices for the rest of the year. The stock rose 3 cents.

BHP Billiton, Anglo Australian mining company has acquired 55% gain in WMC Resources. The combined company will be second largest copper and third largest nickel producer and the largest holder of the known uranium resources.

Asian markets closed higher across the region with Mumbai and Taipei closing above 1%. Tokyo and HK average closed higher on the back of strength in the U.S. tech stocks. Semiconductor and liquid crystal display maker stocks in Taipei and Soul rallied. Mumbai shares rallied on the strength in Rupee, higher fund inflows and rumored family feud settlement for the largest listed company on the exchange.

Microsoft introduced low cost Windows XP version in India to broaden the market reach in emerging markets and attract first-time users.

U.S. dollar fell against euro in the early morning trading on news of non-farm payroll rose 78,000 vs. estimated rise of 187,000. The dollar has been on the rise for the last three weeks and still trades around eight-month high vs. euro.