Stocks lower on weak employment data

Stocks dropped on the opening on more dreary jobless news. Losses were not severe, much of of the disappointment was already factored into the markets. Dow is off 17, decliners barely ahead of advancers & NAZ is up 8. Banks also are down although the Financial Index is still up 14 from its recent lows.


S&P 500 FINANCIALS INDEX

Value 204.06

Change -2.15

% Change -1.0%

The MLP index fell ½ while the REIT index dropped 2½. REITs have lagged behind other high yielders in recent months & are vulnerable to a setback. High yield funds are still on fire (by their standards). Treasuries found some buying. The yield on the 10-year Treasury bond fell 3 basis points to 3.79%, still high & looking to go higher.


Alerian MLP Index --- 2 weeks




Dow Jones REIT Index --- 2 weeks










Oil & gold were soft on the job report. Gold is holding above 1100, becoming a key support level.

CLG10.NYM

...Crude Oil Feb 10

...82.28

... 0.38 .......(0.5%)

GCF10.CMX

...Gold Jan 10

...1,128.20

... 4.90 .......(0.4%)

GLD (ETF --- 2 weeks

Photo: Bloomberg



U.S. employers unexpectedly cut 85K jobs in Dec. The Labor Dept reported Nov payrolls were revised to show the economy actually added 4K jobs rather than losing 11K as initially reported, breaking a streak of 22 consecutive monthly losses. However, with revisions to Oct the economy lost 1K more jobs than previously estimated over the 2 months. The unemployment rate remained unchanged at 10% in Dec reflecting a surprisingly large number of people leaving the labor force. These numbers reinforce the outlook that job recovery will be very, very slow while the economy is mending. Factory payrolls keep declining, at least the rate has not been getting worse in recent months. Adding to global economic woes, Euro-zone unemployment jumped to an 11-year high in Nov & is likely to rise more in the coming year.

•U.S. Lost 85,000 Jobs in December; November Payrolls Revision Shows a Gain


Jobless Rate (%) - 1 year




Change in factory payrolls - year

Photo: Bloomberg



UPS (UPS) will cut 1,800 jobs (less than 1% of its global work force) to reposition itself for a gradual economic recovery. About 1,100 will be offered a voluntary separation package as part of the work force reduction meant to streamline its US small package segment. UPS also raised its profit forecast for Q4, citing improving operations & cost cuts, expecting EPS of 73-75¢ cents per share for Q4. UPS had previously predicted earnings of 58-65¢ per share. UPS rose $2.51 to $59.92

UPS Profit Exceeds Company Forecast, Plans to Cut 1,800 Jobs


UPS --- 1 year











Even a dismal jobs report did not rattle the markets, bulls will take this as a good sign. I don't know.


Dow Jones Industrials --- 2 weeks