The latest monthly payrolls report and a raft of analyst rating revisions made up for a lack of corporate headlines this session. Though the general reaction to those reports was negative, stocks still managed to make their way higher.
The early tone to trade was negative as participants pressured stocks upon learning that December nonfarm payrolls dropped by 85,000, which took many by surprise since the consensus called for no change to payrolls. However, nonfarm payrolls for November were revised upward to show an increase of 4,000 jobs. That marked the first payroll increase in two years and helped keep the unemployment rate at 10.0%, which was expected.
Financials caught the brunt of the early selling effort and trailed for most of the session, but trimmed their losses to finish 0.5% in the red. News that analysts at Citigroup cut their estimates for Goldman Sachs (GS 174.31, -3.36), Morgan Stanley (MS 32.25, -0.67), and JPMorgan Chase (JPM 44.68, -0.11) triggered some profit taking after the financial sector had climbed 6.4% during the previous four sessions. Financials still netted a weekly gain of nearly 6%.
Analysts at JP Morgan hit Coca-Cola (KO 55.15, -1.04), Colgate-Palmolive (CL 81.51, -1.49), and Alberto-Culver (ACV 29.14, -0.55) with downgrades, which weighed on the defensive-oriented consumer staples sector and sent it to a 0.5% loss.
Retailers had to contend with some downgrades, too, but they were able to cut their loss for the session to 0.1%. Still, Macy's (M 16.92, -0.57) wasn't so fortunate; news of a downgrade by analysts at Goldman Sachs sent the company's shares sharply lower, which reversed the gains that came when the company increased its earnings outlook in the previous session.
Tech stocks bounced back from a recent fit of weakness. Tech was the best performing sector in 2009, booking a 60% annual gain, but it has lagged in the new year. However, renewed support for large-cap issues helped drive the sector to a 0.8% gain this session. They also helped the Nasdaq outperform its counterparts.
Schnitzer Steel (SCHN 55.95, +3.26) was one of the few companies that was out with its latest quarterly results since the previous session's close. The company brought in better-than-expected earnings of $0.23 per share for its latest quarter. That helped steel stocks climb 4.3% this session and 12.7% for the week.
Strength among steel stocks combined with gains from other raw materials stocks, thanks partly to a 0.6% drop by the dollar, to drive the materials sector to a 1.0% gain.
Industrial stocks made up this session's best performing sector. Their 1.5% advance added to the 1.3% gain that they booked in the previous outing. Despite the move, the sector lacked the influence to make it a legitimate leader for the broader market.
Still, the stocks were able to catch a late bid that helped the broader market break free from an afternoon of sideways chop. The support helped stocks finish higher for the fifth straight session and gave the stock market a weekly gain of 2.7%, which marks its best weekly performance in two months.
currency markets:
he euro saw mixed trading against its major rivals as traders considered data showing the Eurozone unemployment rate rose to its highest level since August 1998, while third quarter GDP growth for the region was confirmed.
The jobless rate in the euro area rose to 10% in November from 9.9% in October, the Eurostat reported Friday. For the euro area, this was the highest rate since August 1998. Economists had expected the rate to remain at 9.9%.
The Eurostat confirmed a 0.4% sequential growth in the Eurozone economy in the third quarter. It follows contractions of 0.1% and 2.5% in the second and first quarters.
The euro moved higher amid volatile trading with the dollar after a disappointing jobs report from the U.S. The European currency rose near 1.4400, moving near the high end of a recent trading range.
The U.S. Labor Department revealed that non-farm payrolls declined by 85,000 in December, compared to a revised gain of 4,000 in November.
The euro edged higher against the British pound and approached the 0.9000 mark again. The European currency had earlier slipped to a four-day low of 0.8919.
Factory gate inflation in the U.K. rose rose to 3.5% in December from 2.9% in November, data from Office for National Statistics showed Friday. The annual growth rate recorded in December was the biggest since January 2009 and was also larger than the consensus forecast of 3.1%.
The euro edged slightly lower against the yen but remained near a monthly high reached earlier in the week. The European currency moved near 133.20 after earlier hitting as high as 134.12.
In economic news, German industrial production grew by a seasonally adjusted 0.7% month-on-month in November, reversing a revised fall of 1.7% in the previous month, a report from Federal Ministry of Economics and Technology showed Friday. However, the monthly growth rate stood below the consensus forecast of 1%.
Italy's seasonally adjusted jobless rate rose to 8.3% in November from 8.2% in October, a report by Istat showed on Friday. This was the highest level since March 2004. The Jobless rate figure for October was revised from 8% reported initially.
CommoditiesOil market :
Crude oil gained for a 10th straight day as cold weather across much of the company boosted demand hopes and offset a larger-than expected buildin supplies reported by the Energy Information Administration. Light sweet crude for February delivery rose to $83.18 per barrel, up $1.41 on the session. Prices had briefly dipped as low as $80.85 but later reached as high as $83.52. The dollar fell against the euro, losing the $1.44 mark. The greenback also slipped amid choppy trading versus the pound.
Statistics released by payroll processor ADP showed that the private sector shed 84,000 jobs in December. This followed a revised drop of 145,000 the previous month.Employment data continues to come in with the initial jobless claims report expected at 8:30 a.m. ET. First-time unemployment applicants are expected to rise to 445,000, compared to 432,000 last week.The Labor Department's payroll report is expected on Friday.The Institute for Supply Management revealed Wednesday that its index of national non-manufacturing activity rose to 50.1 for December. This followed a reading of 48.7 in November.U.S. commercial crude oil inventories increased by 1.3 million barrels to 327.3 million in the week ended January 1. A more modest rise of 200,000 barrels was predicted.
Total motor gasoline inventories increased by 3.7 million barrels last week. A build of 500,000 barrels was expected.Distillate fuel inventories decreased by 300,000 barrels, less than the predicted drop of 2 million barrels.Propane/propylene inventories decreased by 3.1 million barrels. Late Tuesday, the American Petroleum Institute reported crude oil inventories declined 2.3 million barrels in the week ended Jan. 1. Gasoline supplies rose 5.6 million barrels, according to the API.
DISCLAIMER
These views/ forecasts/ suggestions, though proferred with the best of intentions, are based on our reading of the market at the time of writing. They are subject to change without notice.Though the information sources are believed to be reliable, the information is not guaranteed for accuracy. Those acting in the market on the basis of these are themselves responsible for any profits or losses that might occur, without recourse to us. World financial markets, and especially the Foreign Exchange markets, are inherently risky and it is assumed that those who trade these markets are fully aware of the risk of real loss involved.
The early tone to trade was negative as participants pressured stocks upon learning that December nonfarm payrolls dropped by 85,000, which took many by surprise since the consensus called for no change to payrolls. However, nonfarm payrolls for November were revised upward to show an increase of 4,000 jobs. That marked the first payroll increase in two years and helped keep the unemployment rate at 10.0%, which was expected.
Financials caught the brunt of the early selling effort and trailed for most of the session, but trimmed their losses to finish 0.5% in the red. News that analysts at Citigroup cut their estimates for Goldman Sachs (GS 174.31, -3.36), Morgan Stanley (MS 32.25, -0.67), and JPMorgan Chase (JPM 44.68, -0.11) triggered some profit taking after the financial sector had climbed 6.4% during the previous four sessions. Financials still netted a weekly gain of nearly 6%.
Analysts at JP Morgan hit Coca-Cola (KO 55.15, -1.04), Colgate-Palmolive (CL 81.51, -1.49), and Alberto-Culver (ACV 29.14, -0.55) with downgrades, which weighed on the defensive-oriented consumer staples sector and sent it to a 0.5% loss.
Retailers had to contend with some downgrades, too, but they were able to cut their loss for the session to 0.1%. Still, Macy's (M 16.92, -0.57) wasn't so fortunate; news of a downgrade by analysts at Goldman Sachs sent the company's shares sharply lower, which reversed the gains that came when the company increased its earnings outlook in the previous session.
Tech stocks bounced back from a recent fit of weakness. Tech was the best performing sector in 2009, booking a 60% annual gain, but it has lagged in the new year. However, renewed support for large-cap issues helped drive the sector to a 0.8% gain this session. They also helped the Nasdaq outperform its counterparts.
Schnitzer Steel (SCHN 55.95, +3.26) was one of the few companies that was out with its latest quarterly results since the previous session's close. The company brought in better-than-expected earnings of $0.23 per share for its latest quarter. That helped steel stocks climb 4.3% this session and 12.7% for the week.
Strength among steel stocks combined with gains from other raw materials stocks, thanks partly to a 0.6% drop by the dollar, to drive the materials sector to a 1.0% gain.
Industrial stocks made up this session's best performing sector. Their 1.5% advance added to the 1.3% gain that they booked in the previous outing. Despite the move, the sector lacked the influence to make it a legitimate leader for the broader market.
Still, the stocks were able to catch a late bid that helped the broader market break free from an afternoon of sideways chop. The support helped stocks finish higher for the fifth straight session and gave the stock market a weekly gain of 2.7%, which marks its best weekly performance in two months.
currency markets:
he euro saw mixed trading against its major rivals as traders considered data showing the Eurozone unemployment rate rose to its highest level since August 1998, while third quarter GDP growth for the region was confirmed.
The jobless rate in the euro area rose to 10% in November from 9.9% in October, the Eurostat reported Friday. For the euro area, this was the highest rate since August 1998. Economists had expected the rate to remain at 9.9%.
The Eurostat confirmed a 0.4% sequential growth in the Eurozone economy in the third quarter. It follows contractions of 0.1% and 2.5% in the second and first quarters.
The euro moved higher amid volatile trading with the dollar after a disappointing jobs report from the U.S. The European currency rose near 1.4400, moving near the high end of a recent trading range.
The U.S. Labor Department revealed that non-farm payrolls declined by 85,000 in December, compared to a revised gain of 4,000 in November.
The euro edged higher against the British pound and approached the 0.9000 mark again. The European currency had earlier slipped to a four-day low of 0.8919.
Factory gate inflation in the U.K. rose rose to 3.5% in December from 2.9% in November, data from Office for National Statistics showed Friday. The annual growth rate recorded in December was the biggest since January 2009 and was also larger than the consensus forecast of 3.1%.
The euro edged slightly lower against the yen but remained near a monthly high reached earlier in the week. The European currency moved near 133.20 after earlier hitting as high as 134.12.
In economic news, German industrial production grew by a seasonally adjusted 0.7% month-on-month in November, reversing a revised fall of 1.7% in the previous month, a report from Federal Ministry of Economics and Technology showed Friday. However, the monthly growth rate stood below the consensus forecast of 1%.
Italy's seasonally adjusted jobless rate rose to 8.3% in November from 8.2% in October, a report by Istat showed on Friday. This was the highest level since March 2004. The Jobless rate figure for October was revised from 8% reported initially.
CommoditiesOil market :
Crude oil gained for a 10th straight day as cold weather across much of the company boosted demand hopes and offset a larger-than expected buildin supplies reported by the Energy Information Administration. Light sweet crude for February delivery rose to $83.18 per barrel, up $1.41 on the session. Prices had briefly dipped as low as $80.85 but later reached as high as $83.52. The dollar fell against the euro, losing the $1.44 mark. The greenback also slipped amid choppy trading versus the pound.
Statistics released by payroll processor ADP showed that the private sector shed 84,000 jobs in December. This followed a revised drop of 145,000 the previous month.Employment data continues to come in with the initial jobless claims report expected at 8:30 a.m. ET. First-time unemployment applicants are expected to rise to 445,000, compared to 432,000 last week.The Labor Department's payroll report is expected on Friday.The Institute for Supply Management revealed Wednesday that its index of national non-manufacturing activity rose to 50.1 for December. This followed a reading of 48.7 in November.U.S. commercial crude oil inventories increased by 1.3 million barrels to 327.3 million in the week ended January 1. A more modest rise of 200,000 barrels was predicted.
Total motor gasoline inventories increased by 3.7 million barrels last week. A build of 500,000 barrels was expected.Distillate fuel inventories decreased by 300,000 barrels, less than the predicted drop of 2 million barrels.Propane/propylene inventories decreased by 3.1 million barrels. Late Tuesday, the American Petroleum Institute reported crude oil inventories declined 2.3 million barrels in the week ended Jan. 1. Gasoline supplies rose 5.6 million barrels, according to the API.
DISCLAIMER
These views/ forecasts/ suggestions, though proferred with the best of intentions, are based on our reading of the market at the time of writing. They are subject to change without notice.Though the information sources are believed to be reliable, the information is not guaranteed for accuracy. Those acting in the market on the basis of these are themselves responsible for any profits or losses that might occur, without recourse to us. World financial markets, and especially the Foreign Exchange markets, are inherently risky and it is assumed that those who trade these markets are fully aware of the risk of real loss involved.
