10:00 ET Dow -75, Nasdaq -42, S&P -11.36: [BRIEFING.COM] A much weaker than expected April employment report has the markets reassessing where the economy stands. The contention among market bulls had been the consumer would remain confident and spend the domestic economy out of its recent malaise. At the very least, the consumer side was to prevent further deterioration until capital spending ramped again. The unemployment rate increased to 4.5% versus its 4.3% reading in the month prior. This has many questioning whether the trough in the economic cycle has yet to be seen. If there is a silver lining in the release, it's that a 50 basis point interest rate cut is much more likely on the heels of these data. Briefing.com has been projecting a half point cut since the Fed's most recent inter-meeting ease. The market reaction has not been as severe as futures trading suggested. The Nasdaq has worked its way back over near term support at 2100 and the Dow has pulled well off the morning's worst levels. Big Board volume could be characterized as moderate while Nasdaq volume is on the light side. DJTA -1.2%... DJUA +0.1%... SOX -3.8%... XOI +0.7%... BTK -3.1%... Nasdaq 100 -3.2%... S&P Midcap 400 -1.2%... Russell 2000 -1.0%... NYSE Adv/Dec 828/1499... Nasdaq Adv/Dec 704/1990.
09:45 ET Dow -92, Nasdaq -41, S&P -12.70: [BRIEFING.COM] It's no real surprise that the markets have sold off on the open. A weak April employment report has investors reconsidering just how the economy is situated. A very early read on the internals shows they're reasonably weak on both the NYSE and the Nasdaq yet have steadily improved from opening levels. The sell off is not so broad that the market entirely lacks for strength. Sectors such as gold, oil, beverages, tobacco and health care are experiencing early buy interest. Weakness is evident across technology and also includes financials and retail. Dow component Microsoft (MSFT +0.9%) is a notable source of strength in the early going.
09:15 ET: [BRIEFING.COM] As the markets take time to look over the report, it's not looking any better. S&P futures now trade at 1240, which is 13 points under fair value, while the Nasdaq 100 futures are trading lock limit down at 1844, which is 44 points under fair value. The question now is not whether the market sells off early, it's a matter of how it sells off. With the Nasdaq futures lock limit down (i.e. as far down as they're permitted to go) and Dow futures off by 128 points, traders will be watching for whether early activity looks like extreme and indiscriminate selling on high volume or whether it has the look of traders "backing off" the market. The Nasdaq Pre-Market Indicator is off by 47 points which puts the open for index in the area of 2100 which is first support (and not that extreme). Secondary support is evident in the 2060 area.
08:45 ET: [BRIEFING.COM] The April Employment Report indicated weakness which was widespread -- job declines in construction, manufacturing, and services. The average workweek held steady, which is a lone bright spot. Overall, this report confirms what Briefing.com economists had feared -- that we may not have seen the worst of this economic downturn. We've been anticipating another Fed rate cut of 50 basis points on May 15 and this report makes such a move much more likely. For the near term at least, investors will be returning to worries over recession as the consumer side of the economy is showing signs of deterioration. It's worth noting Briefing.com was projecting a decline in payrolls of 75K. While the actual number came in down 223K, our estimate was directionally correct and much closer than consensus estimates for a 25K increase. S&P futures now trade at 1241, 12 points under fair value, while the Nasdaq 100 futures are trading lock limit down at 1844 which is 44 points under fair value.
08:35 ET: [BRIEFING.COM] Results of the April employment report with expectations in parenthesis; nonfarm payrolls -223K (+25K); unemployment rate 4.5% (4.4%); hourly earnings 0.4% (0.3%); average workweek 34.3 (34.2). Initial response to the headlines is negative as these data are much weaker than expected. Futures have sold off on this report. The S&P futures now trade at 1245, eight points under fair value, while the Nasdaq 100 futures are at 1844 which is 44 points under fair value.
07:55 ET: [BRIEFING.COM] S&P futures +1.5, or 2.5 pts above fair value; Nasdaq 100 futures +15, or 13 pts above fair value. Have seen a nice move higher in the Nasdaq futures over the past half hour; no clear reason for the uptick that we have been able to find yet.
07:20 ET: [BRIEFING.COM] This morning's fair value figures -- S&P 500 fair value: 1253; closed 1 pt above fair value. Nasdaq 100 fair value: 1888; closed 2 pts below fair value. Current indications: S&P 500 futures are -1.7, or 0.7 pts below fair value. Nasdaq 100 is -10.5, or 12.5 pts below fair value... Little volatility this market in pre-market as investors wait for the April employment data to be reported at 8:30 ET before making any commitments.
06:15 ET: [BRIEFING.COM] S&P futures trading at 1255, 2.0 points over fair value, Nasdaq 100 futures trading at 1888, 0 points below fair value. The 30-year bond is up a tick at 5.635%. The dollar is little changed versus the yen, but weaker against the euro.
06:14 ET: FTSE +0.92%, DAX +0.06%: [BRIEFING.COM] European stocks modestly higher on the back of gains in the telecom sector. Telecom boosted by Goldman Sachs’ upgrade of the sector to "overweight" from "neutral". Deutsche Telecom and Vodafone outperform on the announcement. Oil shares rebound following recent inventory concerns, while finance has been under some pressure with the Morgan Stanley downgrade of Deutsche Bank and news from SocGen, France’s third-biggest lender, that it expects a "significant" decline in first quarter profit due to the deterioration in the US economy.
06:13 ET Nikkei closed%, Hang Seng -2.38%: [BRIEFING.COM] Asian stocks mostly lower with technology underperforming on the back of price pressure concerns. Hong Kong off more than 2.3% with property shares hit by a decline in transactions. Telecom also hit hard, while HSBC still under pressure on speculation that it will acquire Merrill Lynch Taiwan off 3%, its biggest one-day drop in two months. United Microelectronics hit by reports that it may post a Q2 loss, while World Wiser Electronics was pressured by plans to sell more shares and take on more debt to finance acquisitions. Korea closed a tad higher despite a 3% decline in Samsung Electronics. Market boosted by favorable earnings from SK Telecom.
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Close Dow -80.03 at 10796.65, Nasdaq -74.40 at 2146.20, S&P -18.85 at 1248.58: [BRIEFING.COM] The market's recent enthusiasm for owning equities was tempered today by a batch of weaker than expected economic data, talk of an impending price war in the PC industry, and a bothersome view of order trends from chip equipment maker, Novellus Systems (NVLS -3.05)... Overall, though, it was the economic data that dictated the course of today's trade as they forced traders to question the prospects for an economic rebound, and an earnings rebound, in the latter half of the year, not to mention the idea that perhaps the market has come too far without enough fundamental support... The disconcerting details included a 9K increase in initial claims for unemployment benefits to 421K for the week of April 28 which brought the 4-wk moving average to 405K-- the highest level since Oct. 1992... In addition, job-placement firm, Challenger, Gray & Christmas, reported that businesses in April announced plans to eliminate165.6K positions-- the largest for any month since the firm started tracking such announcements in 1993... The other troubling indicator was the non-manufacturing NAPM Index... It fell to 47.1% in April from 50.3% in March... The fall below the 50% neutral mark was below expectations for 50.2%, and suggests a broadening of scope in terms of the economic downturn... Altogether, the data set an ominous stage for tomorrow's employment report and prompted Briefing.com to revise its payrolls forecast to a decline of 75K from a gain of 20K... For additional projections, be sure to visit Briefing.com's Economic Calendar... Aside from the economic data, talk of a brewing price war between Dell (DELL -1.80) and Compaq (CPQ -0.55), and a comment from the CEO at Novellus that he doesn't see a recovery in orders until Q4 at best, investors found little incentive to own equities in today's trade with the exception of some late buying activity that was probably a case of some short covering ahead of the jobs report... Interestingly, a number of bank stocks were contributors in the closing rebound effort... That development notwithstanding, today's selling interest was broad-based from an industry and market-cap standpoint... Pacing the declines were the technology, drug, retail, brokerage, homebuilding, and basic materials companies... By the closing bell, alcohol, tobacco, and conglomerates were the only S&P industry groups to gain at least 1.0%... DJTA -1.1%... DJUA -1%... SOX -3.5%... DOT -6.5%... XOI -0.7%... BTK -4.6%... Nasdaq 100 -4.3%... S&P Midcap 400 -1.6%... Russell 2000 -1.2%... NYSE Adv/Dec 1200/1848... Nasdaq Adv/Dec 1421/2328. |
