DOW 10585 will again be looking towards stumbling economy and prospects for next few quarters. INTC won't help enough
Note the talk of more aggressive Fed. 1/2 point hike coming
Today's wild guess. Look for low of 10478, with close maybe 10519-25
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U.S. stocks set for mixed open after weak job data
Friday December 3, 9:12 am ET
By Mark Cotton
NEW YORK (CBS.MW) - U.S. stock futures turned mixed Friday as a much weaker-than-expected employment report for November tempered the positive impact of a raised fourth quarter sales forecast from Intel.
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U.S. nonfarm payrolls increased a disappointing 112,000 in November while the unemployment rate dipped to 5.4 percent, the Labor Department estimated.
Economists were looking for stronger growth of about 204,000 in November, according to a survey conducted by CBS MarketWatch. None of the 42 economists surveyed forecast a figure as low as 112,000.
Dow futures slumped into negative territory on the job report, erasing a 40 point gain, to trade down 10 points, at 10,584.
Nasdaq 100 futures weathered the report better and were last up 8.50 points, at 1,621.50 after being up as much as 16 points prior to the data. Intel's revised forecast was behind much of the tech-rich index's pre-market strength.
S&P 500 futures were up 1.2 points, at 1,191.70.
"Sentiment levels in the stock market are at very high levels right now, "said Michael Sheldon, chief market strategist at Spencer Clarke LLC. "The employment report may take the wind out of the market on a short-term basis and lead to a little bit of profit taking."
"However market internals in general remain extremely positive, so it's unlikely, barring a major shock such as a rapid decline in the dollar or a spike in energy prices, that the stock market will experience a major decline between now and year end."
On Thursday, stocks ended mixed as a sharp fall in oil prices for a second straight session took some of the sting out of a lackluster sales performance from retailers in November.
The Dow Jones Industrial Average (^DJI - News) fell 5.10 points, to 10,5485.12.
The Nasdaq Composite Index (NasdaqSC:^IXIC - News) rose 5.34 points, to 2,143.57 while the S&P 500 Index (CBOE:^SPX - News) dipped 1.04 points, to 1,190.33.
On the bond market, treasury prices soared on the job data. The benchmark 10-year note was 30/32 ahead, at 99 21/32. Its yield (CBOE:^TNX - News) , which moves in the opposite direction of price, fell to 4.29 percent.
"One of the positives is that the Fed may become a little aggressive in raising interest rates," said Sheldon of Spencer Clarke. The Federal Reserve is due to meet on December 14 to discuss interest rates. The Fed's key Fed Funds rate currently stands at 2 percent.
On the currency markets, the dollar dropped against the euro and the yen after the Labor Department reported U.S. job growth slowed in November. The greenback was most recently down 0.4 percent against the euro, at $1.3323. The U.S. currency was off 0.3 percent versus the yen, at 102.89.
Crude futures continued to move lower in early trading after two straight sessions of steep declines, which has seen the price of oil tumble 14 percent.
The benchmark January contract was down 55 cents at $42.70 in electronic trading.
Intel soars on Q4 sales forecast
In the second major focus for the market, shares of Intel (NasdaqNM:INTC - News) soared 8.4 percent, to $24.63 in pre-market trading on Instinet after the world's biggest chip maker lifted its sales forecast for the fourth quarter.
In a note to clients however, Merrill Lynch however said it doubted the chip maker would post its third straight year of double digit revenue growth, saying this had not happened since 1996.
The brokerage said the company still has more capacity than it can fill, which it described as "a problem that isn't going to go away in a single quarter."
In other news, IBM shares climbed 2 percent in pre-market dealings on a New York Times report that it is in talks with Levono Group, China's largest maker of personal computers, to sell its personal computer business.
The paper said Big Blue expects to get between $1 billion and $2 billion for its PC operations.
Elsewhere in technology, Wachovia Securities downgraded application software makers Oracle (NasdaqNM:ORCL - News) and Germany's SAP (NYSE:SAP - News) to "market perform" from "outperform".
Oracle has outperformed over the past three months due to the increasing likelihood that the company will acquire rival PeopleSoft Inc. (NasdaqNM:PSFT - News) , while most near-term upside on SAP was already built in the stock price, even though the fundamentals of the company remain strong, the broker said.
Oracle shares were off 8 cents at $12.87 but U.S.-listed shares of SAP managed to shrug off the downgrade, to trade up 16 cents at $45.26 in pre-market dealings.
In the retail sector, shares of Target (NYSE:TGT - News) fell 1.2 percent to $51.78 in pre-market dealings after Smith Barney downgraded the company to "hold", suggesting clients consider shifting their investments to Wal-Mart Stores, Inc. (NYSE:WMT - News) .
Weinswig said the Target downgrade was based on a lack of near-term catalysts, tough same-store sales comparisons, and a belief that the retailer's shares appear to be fully valued.
Wal-Mart shares were unchanged at $53 ahead of the bell.
Nokia (NYSE:NOK - News) shares slipped 5 cents to $16.67 in pre-market dealings after the Finnish company said two key executives are to leave its networks business.
The departures mark the second round of resignations in two weeks and turn the spotlight on Nokia's infrastructure unit, which recently lost its largest American client. |
