Market Update: Stocks Mixed on Jobs Report's Mixed Signals
The
Nasdaq Composite Index was making modest headway going into the midsession, while the blue-chip
Dow Jones Industrial Average was sticking to the downside, an about-face from its triple-digit gains a week ago.
One piece of news that wasn't helping the Dow was the
employment report
, which showed that job growth slowed in October, but that unemployment remained at its 30-year low rate of 3.9%, while average hourly earnings rose. Labor markets that are too tight and wages that are too high are inflationary, and inflation, of course, is considered bad for the economy and for business.
This morning's wage inflation number is particularly important, considering signs from yesterday's
productivity report that showed the rate of worker compensation rising faster than expected.
TheStreet.com
wrote a separate
story that looked at what the jobs report says about the economy.
Meanwhile,
Qualcomm
(QCOM) - Get Report
gave the Comp a reason to rally with last night's release of
earnings that beat estimates by a penny. Though the company's top-line revenue growth was weaker than expected for the quarter, it said it was comfortable with fourth-quarter estimates. Qualcomm was lately soaring 13.8% and was one of the Nasdaq's most actively traded stocks.
Another big gainer was
Juniper Networks
(JNPR) - Get Report
, which sells fiber-optic network equipment. It was up 5%.
Such tech heavyhitters as
Oracle
(ORCL) - Get Report
,
Sun Microsystems
(SUNW) - Get Report
and
BroadVision
(BVSN) - Get Report
were all in on the fun as well.
The big winner on the Comp was
Professional Detailing
(PDII)
, which yesterday posted third-quarter earnings of 41 cents a share, beating the seven-analyst estimate of 35 cents and up from year-ago earnings of 18 cents. The stock gained $25.63 to $110.63
The Dow was stumbling under the weight of widespread weakness, particularly in recent blue-chip winners such as
IBM
(IBM) - Get Report
and
J.P. Morgan
(JPM) - Get Report
.
American Express
(AXP) - Get Report
lately adding 9 points to the index, was contributing the most upside pull.
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Sector Watch
Retail stocks were suffering and so were transports.
The
S&P Retail Index
was off 2%. This morning's unemployment report reminded investors just how hard a time retailers are going to have filling spots in the upcoming holiday season.
Transport stocks -- particularly airlines -- were having a bumpy ride, too. The
American Stock Exchange Airline Index
was falling 1.3%, while the
Dow Jones Transportation Average
was off 1.4%.
United Parcel Service
(UPS) - Get Report
was down 1.7% after it said it would acquire at least 13 pre-owned MD-11 planes from U.S. aircraft manufacturer
Boeing
(BA) - Get Report
last night.
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Bonds/Economy
Bonds slipped this morning following mixed signals from the employment data showing that average hourly earnings were rising faster than expected.
Following this morning's hotter-than-expected wage growth number, the benchmark 10-year
Treasury note was face down in a puddle, with prices off 13/32 to 99 20/32, boosting the yield to 5.799%.
The 30-year
Treasury bond was 22/32 lower, to 105 25/32, and yielding 5.838%.
The
employment report
(
definition |
chart |
) for October presented a mixed picture. Nonfarm payrolls grew 137,000, below expectation of a rise of 184,000 and down from September's 195,000. The unemployment rate was unchanged at 3.9%. Average hourly earnings however, rose 0.4% ahead of expectation of a 0.3% rise and well above the September increase of 0.2%.
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