Employers Cut Jobs; U.S. Stocks Struggle

123jump.com Staff
31 Mar, 2010
New York City

U.S. stocks traded lower after private employers cut jobs in February surprising most economists. Crude oil inventories at the end of last week increased but gasoline inventories edged up less than expected. New orders for manufactured goods increased in seven of last nine months.

[R]11:45 AM New York – U.S. stocks traded lower after private employers cut jobs in February surprising most economists. Crude oil inventories at the end of last week increased but gasoline inventories edged up less than expected. New orders for manufactured goods increased in seven of last nine months.[/R]

U.S. stocks and benchmark indexes traded lower after private sector cut payrolls in March. Greece plans to offer dollar bonds after its euro bonds offering got only 40% of subscription this week.

The latest data released from ADP Employer Services indicated a decline of 23,000 in March after a revised drop of 24,000 in February.

The cut surprised several economists as most had expected gains between 30,000 and 100,000 according to a informal survey conducted by 123jump.com.

Employers with more than 499 workers cut 7,000 jobs and with medium-sized businesses with 50 to 499 employees trimmed 4,000 jobs.

Crude oil inventories at the end of last week increased 2.9 million barrels to 354.2 million barrels. Motor Gasoline inventories increased 0.3 million barrels and that of finished gasoline decreased and distillate decreased by 1.1 million barrels.

New orders for manufactured goods in February, up seven of the last nine months, increased $2.1 billion or 0.6% to $383.5 billion. This followed a 2.5% January increase. Excluding transportation, new orders increased 0.7%.

Commodities, Currencies and Bonds

Crude oil futures continued its climb for the second week in a row. Oil traded up 94 cents to $83.31 a barrel and natural gas futures increased 6 cents to $4.04 per mBtu.

Gold futures increased $8 to $1,113.70 an ounce

The dollar edged lower against the euro at $1.349 and against the Japanese yen edged higher to 92.93 yen.

Yields on 10-year U.S. bonds increased to 3.82% and 30-year U.S. bonds decreased to 4.73%.

Stock Movers

Chiquita Brands International Inc traded lower after the bananas marketer said first quarter earnings will be “substantially” lower than a year ago. The company also finalized its joint venture with yogurt maker Danone SA to sell fruity drinks.

Honeywell International Inc raised its first quarter earnings per share estimate to between 45 cents to 49 cents from the previous estimate of 45 cents.

Landec Corp declined after the food packager said its 2010 earnings will only match last year earnings.

Peabody Energy Corp declined 2% after Australia based Macarthur Coal Ltd rejected the A$3.3 billion offer and said it undervalues the company.

SAIC Inc declined more than 5% after the defense contractor lowered its annual earnings outlook.

Earnings Review

3Com Corporation ((COMS)), the networking systems maker said third quarter sales rose 6.5% to $345.9 million from $324.7 million a year ago. Net income in the quarter was to $41.4 million or 10 cents per diluted share compared to net income of $1.9 million or break even per share a year ago.

Landec Corporation ((LNDC)), a maker of agricultural and food packaging products said third quarter sales rose 8% to $58.1 million from $53.9 million a year ago. Net income in the quarter rose 13% to $1.7 million or 7 cents per diluted share compared to net income of $1.5 million or 6 cents per share a year ago.

SAIC, Inc ((SAI)), the provider of scientific, engineering, technology and intelligence services said fourth quarter revenues rose 6.3% to $2.68 billion from $2.52 billion a year ago. Net income in the quarter rose 2.5% to $123 million or 31 cents per diluted share compared to net income of $120 million or 29 cents per share a year ago.

Sealy Corporation ((ZZ)), a mattress maker said first quarter sales rose 9.5% to $339.6 million from $310.0 million a year ago. Net income in the quarter rose 32.5% to $5.7 million or 3 cents per diluted share compared to net income of $4.3 million or 5 cents per share a year ago.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed lower 7.20 or 0.06% to 11,089.94, and Hang Seng index in Hong Kong decreased 135.44 or 0.63% to 21,239.35, and CSI 300 index in China lower 21.10 or 0.63% to 3,345.61. ASX 200 index in Australia decreased 41.30 or 0.84% to 4,875.50. The FTSE Bursa KL Composite index in Malaysia was higher 1.22 or 0.09% to 1,320.57.

The Kospi Index in South Korea decreased 7.34 or 0.43% to close at 1,692.85. SET index in Thailand closed lower 0.82 or 0.10% to 787.98. JSE Index in Indonesia decreased 20.97 or 0.75% to 2,777.30. The Sensex index in India decreased 62.40 or 0.35% to 17,527.77.

Europe Markets Review

In London FTSE 100 Index traded higher 7.82 or 0.14% to 5,680.14, in Paris CAC 40 Index increased 0.18 or 0.00% to 3,987.59 and in Frankfurt DAX index traded higher 9.34 or 0.15% to 6,151.79. In Zurich trading SMI increased 26.64 or 0.39% to 6,898.06.