Wall Street Endures Flux Ahead of April Jobs Report
The pace of job growth in the U.S. is expected to have slowed in April, but by how much?
The uncertainty kept stocks in flux for much of Thursday, with the Nasdaq dropping 0.18% while the S&P 500 ended the day down 0.02% and the Dow Jones Industrial Average rose 0.18%.
The U.S. nonfarm payrolls report, due out Friday morning, is expected to show 200,000 jobs were added in April, a slight slowdown after two months of strong growth. Some 215,000 jobs were added in March along with 245,000 in February.
"As U.S. growth momentum continues to slow, the fallout is expected to begin showing up in labor market activity with employment growth slowing in April," TD Securities analysts wrote in a note. "The unemployment rate should hold at 5%."
The labor report will take on added significance as it is scrutinized for possible effects on the FederalReserve and the timeline of the central bank's interest rate hikes. The Fed recently left short-term rates unchanged following its April meeting and will meet again on June 14-15.
Jobless claims data confirmed a slowing trend in the labor market. The number of new claims for unemployment benefits climbed 17,000 to 274,000 in the final week of April, according to the Labor Department. The measure was at a five-week high, though it remained near its lowest level since 2000. The less-volatile four-week jobless claims average increased 2,000 to 258,000.
Supply disruptions in Canada and Libya triggered a rally in crude oil, which has traded at low prices for an extended period because of a global surplus. West Texas Intermediate crude oil gained 1.2% to $44.32 a barrel.
In Canada, a state of emergency was declared in Alberta after a wildfire that began Sunday continued to threaten the region. Separately, fighting between rival factions in Libya has blocked oil tankers, prompting Tripoli officials to warn that the country's oil output could fall by 120,000 barrels a day if the disruption continues.
"Crude prices are surging higher ... as supply disruptions in different parts of the world overshadow yesterday's bearish inventory numbers from the [Energy Information Administration]," said Robbie Fraser, commodity analyst at Schneider Electric. "While these situations do not necessarily indicate long-term threats to supply, they are the types of issues that should become increasingly important for crude price movement as the supply/demand gap narrows and the market tightens due to elevated summer demand."
In earnings news, Alibaba (BABA) - Get Report bested revenue estimates in its fourth quarter after gross sales volume in China continued to grow in the double digits. Revenue rose 39% to $3.75 billion, above estimates of $3.57 billion. Gross merchandise volume from transactions in China climbed 24%.
Tesla (TSLA) - Get Report fell 5% despite reporting a narrower-than-expected loss in its first quarter. The electric carmaker reported a quarterly loss of 57 cents a share, 3 cents better than analysts had expected. Tesla also moved its production goal of 500,000 cars a year up to 2018, two years sooner than previously forecast.
Fitbit (FIT) - Get Report plummeted 19% on a disappointing second-quarter outlook. The fitness tracking company expects adjusted earnings no higher than 11 cents a share, a far cry from consensus of 26 cents. Fitbit topped first-quarter earnings and sales expectations.
SeaWorld (SEAS) - Get Report slumped 5% as ballooning expenses and declining theme park attendance caused first-quarter losses to widen. The aquatic theme park operator reported a net loss of $84 million, nearly double the loss of the year-ago quarter. The company has suffered three years of harsh criticism over the captivity and breeding programs of its orcas.
