Jobless Rate Declines to 9.7%; Euro Worries

123jump.com Staff
05 Feb, 2010
New York City

U.S. stocks were searching for direction in the early trading. January unemployment rate declined to 9.7%. Investors remained unconvinced that Spain, Portugal and Greece have a viable plan to lower their budget deficit and the dollar edged higher.

[R]10:45 AM New York – U.S. stocks were searching for direction in the early trading. January unemployment rate declined to 9.7%. Investors remained unconvinced that Spain, Portugal and Greece have a viable plan to lower their budget deficit and the dollar edged higher. California and Pennsylvania state budgets are also worrisome in the U.S.[/R]

Stocks in New York trading edged lower and unemployment rate in January declined. Investors remained concerned after the ECB President Jean-Claude Trichet comments failed to convince that Portugal, Spain and Greece has a viable plan to lower their budget deficit to target set by EU regulators.

January unemployment fell from 10% to 9.7%, the lowest since August and non-farm payroll employment declined 20,000.

The largest job losses were in construction, transportation and warehousing sectors. The number of long term unemployed increased in the month to 6.3 million.

Federal government added 33,000 to the payroll and state and local government cut the staff by 41,000. Overall, government payrolls declined 8,000 in the month.

Commodities declined in the early trading. Crude oil futures declined 53 cents to $72.61 a barrel and natural gas futures increased 13 cents. Gold futures decreased $6.70 to $1.056.30 an ounce.

Yields on 10-year U.S. Treasuries hovered at 3.58% and 30-year bonds traded at 4.53%.

The euro declined against the dollar to $1.375 as investors worry that Spain, Portugal and Greece may need a bailout to curb budget deficit to meet the EU regulatory requirements.

Stock Movers

Airgas Inc surged more than 40% after Air Products & Chemical Inc. said that it may take its $60 a share offer to shareholders despite the management’s reservation.

Luminex Corp surged more than 7% to after the biological testing technologies estimated 2010 sales between $138 million and $148 million.

Tyson Foods Inc soared nearly 8% after the meat processor reported sharply higher first quarter operating earnings.

Earnings Review

Aetna Inc, the insurer reported fourth quarter sales rose 13% to $8.76 billion from $7.76 billion a year ago. Net income in the quarter fell 15% to $165.9 million or 38 cents per diluted share compared to net income of $194.7 million or 42 cents per share a year ago.

Knoll, Inc, an office furniture maker said fourth quarter sales fell 33.4% to $183.9 million from $276.3 million a year ago. Net income in the quarter fell 82.4% to $4.0 million or 9 cents per diluted share compared to net income of $22.7 million or 50 cents per share a year ago.

Sara Lee Corporation, the food maker said second quarter sales were flat at $2.86 billion from $2.86 billion a year ago. Net income in the quarter was $371 million or 53 cents per diluted share compared to net loss of $17 million or 2 cents per share a year ago.

Tyson Foods, Inc, the meat producer reported first quarter sales rose 2% to $6.64 billion from $6.52 billion a year ago. Net income in the quarter was $160 million or 42 cents per diluted share compared to net loss of $102 million or 27 cents per share a year ago.

Weyerhaeuser Company, the forest products company reported fourth quarter sales fell 18% to $1.46 billion from $1.78 billion a year ago. Net loss in the quarter was $175 million or 83 cents per diluted share compared to net loss of $1.21 billion or $5.73 per share a year ago.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed lower 298.89 or 2.89% to 10,057.09, and Hang Seng index in Hong Kong decreased 676.56 or 3.33% to 19,665.08, and CSI 300 index in China lower 65.72 or 2.04% to 3,153.09. ASX 200 index in Australia decreased 107.50 or 2.33% to 4,514.10. The FTSE Bursa KL Composite index in Malaysia was lower 17.13 or 1.35% to 1,247.90.

The Kospi Index in South Korea decreased 49.30 or 3.05% to close at 1,567.12. SET index in Thailand closed lower 11.11 or 1.58% to 691.41. JSE Index in Indonesia decreased 74.24 or 2.86% to 2,518.98. The Sensex index in India decreased 434.02 or 2.68% to 15,790.93.

Europe Markets Review

In London FTSE 100 Index traded lower 88.60 or 1.72% to 5,050.71, in Paris CAC 40 Index decreased 82.13 or 2.23% to 3,607.12 and in Frankfurt DAX index traded lower 71.52 or 1.29% to 5,461.72. In Zurich trading SMI decreased 130.60 or 2.04% to 6,265.91.