December Jobs Report Weaken Indexes

Mayank Mehta
08 Jan, 2010
New York City

U.S. stocks edged lower after employers trimmed 85,000 jobs in December. Commodities declined. November wholesale sales increased 3.3% and inventories added 1.5% but still down 11% from a year ago. Apollo Group fell 5.3% after quarterly earnings gained 33%.

[R]10:40 AM New York – U.S. stocks edged lower after employers trimmed 85,000 jobs in December. Commodities declined. November wholesale sales increased 3.3% and inventories added 1.5% but still down 11% from a year ago. Apollo Group fell 5.3% after quarterly earnings gained 33%.[/R]

Freezing weather continued in the northern hemisphere with more snow expected this weekend. Temperatures as south as Florida as expected to dip near freezing level but minimal damage to orange crop is reported so far.

December non-farm payroll employment fell 85,000 and the unemployment rate was unchanged at 10.0%. The largest job losses were in construction, manufacturing and wholesale trade sectors.

November wholesale sales increased 3.3% to $327.4 billion from the revised October sales and up 0.6% from a year ago month. November inventories increased 1.5% to $386.3 billion from the revised October data and were down 11.0% from a year ago.

European unemployment increased to 10% in November and the U.S. unemployment in December was unchanged at 10%. December U.S. payrolls declined 85,000. The larger than expected payroll decline dragged the European and U.S. indexes lower.

Futures of crude oil decreased 50 cents to $82.16 a barrel and natural gas declined 11 cents to $5.70 per mBtu. Gold was unchanged at 1,133.70 an ounce and copper decreased 0.45 cents to $3.42 a pound.

Frozen concentrate of orange juice futures increased 7.5 cents or 5.3% to $1.4865 a pound.

Yields on the U.S. 10-year Treasuries inched up to 3.81% and 30-year to 4.71%.

Earnings Review

Apollo Group, Inc, the private education provider said first quarter revenues rose 31% to $1.27 billion from $971 million a year ago. Net income in the quarter rose 33% to $240.1 million or $1.54 per diluted share compared to net income of $180.4 million or $1.12 per share a year ago.

PriceSmart, Inc, a warehouse-shopping club reported first quarter revenues rose 3.3% to $315.4 million from $305.2 million a year ago. Net income in the quarter fell 3% to $10.4 million or 35 cents per diluted share compared to net income of $10.7 million or 36 cents per share a year ago.

The Greenbrier Companies, Inc, a manufacturer of railroad freight car equipment reported first quarter sales fell 33% to $171.7 million from $256.1 million a year ago. Net loss in the quarter was $3.2 million or 19 cents per diluted share compared to net loss of $3.9 million or 23 cents per share a year ago.