U.S. Stocks Lacked Direction with Focus on Labor Market

Barry Adams
06 Dec, 2023
New York City

Stocks lacked direction in early trading, and investors reviewed the latest update on the labor market.

Private payrolls rose less than expected in November, confirming the cooling trend, and investors are looking forward to the release of nonfarm payrolls, jobless rates, wages, and jobless claims updates later in the week.

Private payrolls rose 103,000 in November, below the downwardly revised 106,000 increase in October, the ADP reported Wednesday.

The ADP employment series focuses on private employment, and the volatile monthly update is subject to several revisions. 

Economists surveyed by Ticker.com are anticipating nonfarm payrolls to increase by 175,000 in November, faster than the 150,000 increase in September.

The Federal Reserve has increased rates 11 times between March 2022 and June 2023, and the lagged effect of higher rates is visible in the slowing hiring trend in the labor market.

Job openings dropped to a 30-month low in October as employers trimmed new job announcements.

Job openings fell sharply in October after employers across the nation in several industries curtailed announcements for new hires.

The number of job openings declined by 617,000 to 8.7 million, the U.S. Bureau of Labor Statistics reported Tuesday.

Despite the recent market doldrums, market indexes are set to close higher in the quarter and year following a strong rally over five consecutive weeks. 

 

U.S. Indexes and Yields

The S&P 500 index declined 0.2% to 4,565.03, and the Nasdaq Composite decreased 0.3% to 14,240.12.

The yield on 2-year Treasury notes decreased to 4.61%, 10-year Treasury notes inched lower to 4.19%, and 30-year Treasury bonds decreased to 4.32%.

Crude oil decreased $0.47 to $71.81 a barrel, and natural gas prices rose 1 cent to $2.72 a thermal unit.

Gold increased $3.13 to $2,022.55 an ounce as investor expectations shifted. The Federal Reserve is more likely to cut rates sooner than expected in 2024. 

The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 104.10.

 

U.S. Stock Movers

Toll Brothers increased 2% to $89.0 after the luxury home builder reported better-than-expected quarterly results.

Revenue in the fiscal fourth quarter ending in October declined to $3.02 billion from $3.7 billion, net income decreased to $445.5 million from $640.5 million, and diluted earnings per share dropped to $4.11 from $5.63 a year ago.

The backlog of homes at the end of October declined 19% to 6,578 and the value of the backlog fell 22% to $6.95 billion.

During the quarter, the company repurchased approximately 4.3 million shares at an average price of $75.70 per share, for a total of $325.5 million.

In the fiscal year, the home builder repurchased approximately 7.9 million shares at an average price of $72 per share, for a total purchase price of $565.9 million.

The home developer estimated home deliveries in the fiscal 2024 first quarter to range between 1,800 and 1,900 units and the average delivery price per unit to range between $985,000 and $1.05 million.

MongoDB decreased by 5% to $412.0 after the database developer reported quarterly results.

Total revenue in the third quarter increased 30% from a year ago to $432.9 million, and subscription revenue advanced 30% to $418.3 million.

Net loss in the quarter shrank to $29 million from $84 million, and diluted loss per share decreased to 41 cents from $1.23 a year ago.

The company guided fiscal fourth quarter revenue to range between $429 million and $433 million, adjusted earnings between $35 million and $38 million, and adjusted earnings per share between 44 cents and 46 cents.

Box Inc. fell 12.2% to $23.41 after the cloud-based content management software developer reported a muted increase in quarterly revenues and earnings.

Revenue in the fiscal third quarter increased 5% to $261.5 million from $249.9 million, net income increased to $5.64 million from $4.98 million, and diluted earnings per share rose to 4 cents from 3 cents a year ago.

The company estimated fiscal year 2024 revenue between $1.037 billion and $1.039 billion, an increase of 5% at the top of the range, and net income between 15 cents and 16 cents, including an unfavorable exchange rate impact of 17 cents.