Stocks are trying to sort out a thoroughly mixed bag of employment data this morning.
reported no job growth at all for September. The agency said payrolls actually declined by 8,000 jobs in September, confounding economists in the
poll who predicted 218,000 new jobs. The jobless rate stayed steady at 4.2%. But hourly wages gained 0.5%, two-tenths of a point higher than expected.
Focusing on the lack of employment growth, stock futures and bonds initially surged on the news, but then receded as the hourly-wage-gain figure sank in. At 9:05 a.m. the
futures were unchanged, a couple points above fair value and indicating a flattish open. The 30-year Treasury was lately up 5/32 to 99 11/32, putting the yield at 6.173%.
The stock futures "ran into an avalanche of selling up there" after soaring on the jobs report, said Chuck Farra, president of
in Chicago. "My gut feeling was that we weren't going to have a big move today, in terms of net change at the close. I still feel that way."
The Fed and the Employment Report: Join the discussion on
Great. With the
officially in a tightening mood, the negative jobs growth could be just what the bull market ordered, with what promises to be an extremely strong earnings season kicking off on Monday. But exactly how much that matters in the wake of
Hurricane Floyd, alongside the larger-than-expected wage gains, may take the market a while to figure out.
This morning, the biggest news on the earnings front is negative.
has warned that third-quarter earnings will fall short of expectations.
Overnight in Tokyo, with the U.S. employment report looming and Japanese markets closed Monday for a national holiday, traders weren't willing to take on too many long positions. The
fell 74.37, or 0.4%, to 18,062.18.
The dollar maintained its recent gains against the yen, trading between 107.9 yen and 107.2 yen overnight. The greenback was lately quoted at 107.49 yen.
Meanwhile, the size of Japan's economic stimulus package is taking firmer shape. Prime Minister
Economic Planning Agency
Director General Taichi Sakaiya both said that the supplemental budget would exceed 10 billion yen, a figure that was at the top end of expectations even before the unexpected 0.2% rise in Japan's second-quarter
gross domestic product
But the government's ruling coalition of the Liberal Democratic Party, Liberal Party and New Komeito are expected to press for an even larger stimulus package. The coalition yesterday bluntly pressed the
Bank of Japan
for a quantitative easing of monetary policy, with the policy chief of the LDP saying that a refusal by the BOJ to ease would be "just self-righteousness." The BOJ, which has hitherto resisted all such entreaties, meets next week on Wednesday.
Anticipation of today's jobs report kept stocks on a short leash in
, where the
lost 0.78 to close at 13,112.42. The benchmark index had traded within a narrow 100-point band through the entire session.
The big European indices were mixed on the heels of the jobs report. London's
was off 10.9 to 6189.5, while the Paris
was off 29.39 to 4712.87. Frankfurt's
was down 28.15 to 5391.16.
Friday's Wake-Up Watchlist
Xerox warned that it expects to post essentially flat revenue for the third quarter and to see about a 10% to 12% slump in earnings compared with the year-ago 53 cents a share. The
First Call/Thomson Financial
13-analyst consensus estimate called for the company to earn 58 cents a share in the quarter. Xerox blamed weaker revenue in combination with an unfavorable product mix and heightened competitive pressures.
lowered its rating on Xerox to accumulate from buy, while cutting its fiscal 1999 and 2000 earnings estimates to $2.42 from $2.57 a share and to $2.70 from $2.85 per share, respectively.
also cut its rating on Xerox to neutral from buy.
Earnings/revenue reports and previews
(Earnings estimates are from First Call/Thomson Financial.)
posted third-quarter earnings of 21 cents a share, well ahead of the 10-analyst estimate of 15 cents and above the year-ago 19 cents.
new handset models would lead to stronger fourth-quarter results compared with those in the second quarter and boost earnings in 2000, according to a
, whose stock got crushed yesterday, said it expects to report fourth-quarter earnings above the five-analyst estimate of 37 cents. hi/fn said, after its shares were halted on the
Nasdaq Stock Market
, that after a 30% price decline, two major customers had sliced their specialty semiconductor orders for the fourth quarter.
warned it expects third-quarter earnings to come in between 20 cents to 25 cents a share, below the seven-analyst estimate of 35 cents. For the full year, before restructuring and other charges, the company expects to post earnings of between $1.36 and $1.46 a share, below the seven-analyst estimate of $1.72.
Retailers' September same-store sales were up, with discount chains in the lead, according to
The Wall Street Journal
. The newspaper reported that some analysts plan to up their earnings estimates for
as a result of the strong sales.
Mergers, acquisitions and joint ventures
is buying a 5% stake in
of Japan and forming a strategic truck and bus alliance.
Offerings and stock actions
announced it plans to set a $1 billion share-repurchasing plan. Separately, another lawsuit against Aetna was filed yesterday in Mississippi federal court, claiming that the HMO denied participants care.
plans to sell 20 million shares of Genentech stock in an underwritten public offering, which will represent 15.6% of the outstanding common stock of Genentech. Genentech also said its board approved a 2-for-1 stock split. In the wake of the planned offering, Roche's economic and voting ownership of Genentech will be trimmed to about 65%. In conjunction with the stock offering, Roche also plans to issue U.S. dollar-denominated bonds exchangeable with Roche for up to about 5.5 million shares of Genentech stock owned by Roche.
Credit Suisse First Boston
3.2 million-share IPO above-range at $17 a share.
Donaldson Lufkin & Jenrette
3.1 million-share IPO above-range at $21.
set a $25 million share-repurchasing plan.
4.2 million-share IPO at $9, the low end of the estimated $9 to $10 range.
Morgan Stanley Dean Witter
sliced its rating on
to neutral from outperform. Morgan Stanley also downgraded
to neutral from outperform.
Warburg Dillon Read
rolled out coverage of
with a buy rating.
Warburg initiated coverage of
with a hold rating.
Warburg initiated coverage of
with a strong buy rating.
PaineWebber upped its rating on
to a buy from attractive.
Morgan Stanley raised its rating on
to outperform from neutral.
are still in talks to reach an accord before tonight's 11:59 p.m. strike deadline, the
reported. According to the newspaper, negotiations have been hindered by Ford's desire to spin off its
CEO Jill Barad told the company's board that she did not fully understand what was wrong at the company's
division, but assured the board that she would produce a full accounting in the near future, the
The "Inside Wall Street" column in
, penned by Gene Marcial, includes a bullish item on semiconductor assembly equipment maker
Kulicke & Soffa Industries
, which Scott Black, president of
, says should double in 12 months.
Elsewhere in the column, Steve Kroll, a money manager at
Monness Crespi & Hardt
, loves casino stock
. He believes the stock is worth at least $20 and says it might become an attractive takeover target.
Finally, the column offers up a glowing piece on