Market Awaits Payroll Data

albena
30 Nov, -0001
New York City

After Thursday's notable retreat, futures are higher early Friday morning ahead of the much anticipated July employment report due at 8:30 a.m. Monthly payrolls data will largely determine the course of early trading though too-strong jobs report could raise worries that the Fed may have to raise rates more than expected. The earnings calendar is comparatively light Friday.

U.S. AVERAGES

Futures point to a mildly positive start Friday morning but market outlook is closely tied to the jobs figures which are to be released at 8:30 a.m.

Policy makers are to meet next Tuesday to decide whether to lift the federal-funds rate again. The Fed is expected to raise rates by a quarter-point to 3.5%, the 10th such move since June 2004.

A strong job creation report might frighten investors, raising their concerns of more rate increases.

Shares on Wall Street finished lower on Thursday after retail sales from many U.S. companies disappointed the market and investors took profits on gains earlier in the week.

After Thursday's rally oil prices were higher in early trading Friday due to problems reported at the nation's refineries.

Pixar Corp. surged in post-market trading Thursday as the digital-animation studio met its slashed 2Q earnings target, though revenue was well below the average analyst estimate.

Shares of Viacom Inc. may be in focus after the company's flat quarterly earnings report on Thursday.

The earnings calendar is comparatively light Friday.

National Oilwell Varco ((NOV)) is slated to report earnings before the opening bell Friday. Analysts expect the company to make 44 cents per share vs. 25 cents last year.

Cardinal Health ((CAH)) is also scheduled to release its quarterly results today, with analysts forecasting an earnings drop to 89 cents per share.

The Washington Post has to meet a $9.64 a share analyst forecast.

ECONOMIC NEWS

The Labor Department is scheduled to report on July's employment growth on Friday at 8:30 a.m. The average forecast is of payroll growth of 183,000, up versus 146,000 in June and very close to the average over the past 3 and 12 months. The unemployment rate is expected to remain at a 45-month low of 5% in July.

Forecasts for July payrolls range from 100,000 to 275,000, with most gathered between 150,000 and 200,000.

Economists are also expecting a return to a $6 billion increase in consumer installment credit in June after a decline of $3 billion in May.

The Federal Reserve is scheduled to release the consumer credit data at 3:00 p.m. Friday.

INTERNATIONAL MARKET NEWS

Asian-Pacific benchmarks closed lower, pressured by climbing crude-oil prices, weakness in U.S. markets and political uncertainty in Japan, referring to postal privatization. The Japanese Nikkei tumbled 1%, Hong Kong’s Hang Seng declined 0.4%, and South Korea’s Kospi slid 1.98%. Crude-oil ended up 52 cents at $61.38 a barrel on the NYME. The dollar was trading at 111.23 in Tokyo foreign exchange.

European markets were mixed in mid-day dealings on rising crude-oil prices, corporate earnings with Barclays and Michelin among the gainers, and on U.S. non-farm payroll data due later in the day. The German DAX 30 lost 0.3%, the French CAC 40 was flat, and the U.K.’s FTSE 100 rose 0.3% mainly on airline gains.

ENERGY, METALS AND CURRENCIES MARKETS

Oil prices advanced as refinery problems increased supply concerns. Light sweet crude for September delivery gained 42 cents to trade at $61.80 a barrel in electronic trading. London Brent gained 42 cents to $60.54.

Gold declined slightly in Europe as traders awaited key U.S. payroll data. Spot gold was last traded at $437.75 per troy ounce, down from $438.00. Silver retreated to $7.19 per ounce, down from $7.24.

The U.S. dollar steadied its positions against the other major currencies ahead of U.S. payroll data. In European trading the euro stood at $1.2383 dollars, down from $1.2388. The greenback bought 111.59 yen, up from 111.20. The pound was quoted at $1.7786.

EARNINGS NEWS

Alliant Energy, electricity provider, posted 2Q loss from continuing operations of 8 cents per share, vs. income 30 cents per share in the same period last year, while analysts had seen earnings at 27 cents per share.

Allis-Chalmers Energy, drilling and oil field services provider, posted 2Q net income of 12 cents per share, vs. 5 cents per share in the same quarter a year earlier on strong revenue.

Pro-Pharmaceuticals, drug developer, posted a 2Q net loss of 6 cents per share, vs. a net loss of 6 cents per share for the same quarter last year.

Hovnanian Enterprises, single-family detached homes developer, said 3Q dollar value of net contracts rose 34.8%, while the number of net contracts jumped 16.6% compared with the same quarter a year ago. The sales value of contract backlog rose 55.7% and the number of homes in contract backlog climbed 33.3%.

ProspEx Resources, oil and gas company, posted 2Q earnings per share of C$0.03 for the quarter on strong 2Q net earnings compared with 2Q the prior year.

Century Casinos, casino operator, reported 2Q net earnings of 4 cents per share, down vs. 8 cents per share in the year-earlier quarter on revenue growth, missing analysts’ expectations of 8 cents per share

Dynatec, mining companies services operator, posted 2Q net earnings of C$0.012 per share, vs. C$0.007 per share in the year-ago comparable period on revenue growth.

Redwood Trust, real estate investment trust, reported 2Q earnings of $1.50 per share, vs. $1.74 per share in the same quarter a year earlier. Quarterly net interest income jumped to $53.2 million vs. $47.6 million in the year ago corresponding quarter.

Mills, real estate investment trust group, posted 2Q fund from operations of $1.01 a share, up vs. 94 cents a share in the same period last year despite falling revenue, matching analyst forecasts.

CORPORATE NEWS

The Justice Department is pursuing a criminal investigation of allegations that DaimlerChrysler AG's Mercedes unit paid bribes in at least a dozen countries and that senior executives may have been aware of the practice. The investigation came in following a civil inquiry by the SEC that disclosed late last year. Shares of the automaker ended at $49.51 in trading on the Big Board Thursday.

IMPAX Laboratories Inc. ((IPXLE)) disclosed that it has received notification from The Nasdaq Stock Market Inc. that the Nasdaq Listing Qualification Panel has determined to delist its common stock from The Nasdaq National Market, effective Monday, August 8, 2005. IMPAX's failure to file Annual Report on Form 10-K for the fiscal year 2004, and its Quarterly Report on Form 10-Q for the quarter, 2005 violated Nasdaq Marketplace Rule 4310(c)(14) compliance with which is required for continued listing on Nasdaq. IMPAX expects that quotations for its common stock to appear in the Pink Sheets and expects its trading symbol to revert to IPXL effective with the move to the Pink Sheets.

Delphi Corp. ((DPH)) is in discussions with former parent General Motors Corp. ((GM)) and the United Auto Workers about a comprehensive restructuring of Delphi's unprofitable U.S. operations in order to avoid bankruptcy reorganization. The talks are reported to be very constructive and management hopes to restructure out of court. The auto parts maker added that it has drawn $1.5 billion from a $1.8 billion credit facility related to the restructuring talks.

Hovnanian Enterprises ((HOV)) said its backlog for the fiscal 3Q ended July 31 climbed 34.8% in dollar terms, with the number of homes in contract backlog advancing 33.3%. The company delivered 3,967 homes vs. 3,738 in the year-earlier quarter. The number of net contracts for 3Q in the Northeast dropped while the dollar value of contracts increased, which according to the company, is indicative of a moderate shift in the mix of communities over the past 12 months to higher priced but lower volume communities.