Mid-Day Update: Markets Falling as U.S. Jobs Data Disappoints; Financials, Energy Stocks Leading Declines 06/01 12:29 PM 12:29 PM EDT, 06/01/2012 (MidnightTrader) -- Stocks are extending their decline for a third day, with the Dow Jones Industrial Average falling nearly 2% to wipe out all of its 2012 gains, as U.S. jobs growth during May slowed to its smallest increase in a year. Equities also are laboring under a plethora of weak economic data points from elsewhere in the world, including manufacturing growth in China slowing to a near crawl. All 10 industry sectors in the S&P 500 are lower, with financial stocks taking the hardest hits. Energy stocks also are sharply lower as crude oil plunged nearly $4 a barrel this morning before moderating slightly. Gold is higher as the U.S. dollar halted its recent surge following the disappointing jobs report.
U.S. employers added just 69,000 jobs in May, the Labor Deparment reported, well under the 165,000 increase expected by experts in a Marketwatch survey. The unemployment rate rose to 8.2% from Aprils 8.1% rate as 422,000 people re-entered the labor force in one of the few bright spots in an otherwise grim report. The average workweek fell six minutes to 34.4 hours in May, while average hourly earnings added only 2 cents to $23.41. Employment gains for April and March also were revised lower.
Stocks were already falling ahead of the 8:30 a.m. ET jobs report after a string of reports showed little or no manufacturing growth in several global markets. Manufacturing activity in China slowed considerably last month, with the Purchasing Managers' Index for May easing to 50.4 reading from a 53.3 scpre in April, according to government survey released Friday. Analysts polled by Dow Jones Newswires were expecting a 51.5 reading, while a separate Reuters survey put it at 51.1. A PMI figure above 50 indicates growth.
Elsewhere, Britain's manufacturing sector shrank at its fastest pace in three years with the headline activity index falling to a 45.9 in May from a downwardly revised 50.2 in April, its lowest reading since May 2009. Analysts had expected a 49.8 reading. Canada, however, saw its best growth in eight months, with the RBC Canadian Manufacturing Purchasing Managers' Index climbing for a fourth straight month to a 54.7 reading in May from 53.3 in April.
Manufacturing growth in the U.S. also slowed as factories throttled back production and pared inventories in response to weakness in the global economy. The Institute for Supply Management's factory index fell to 53.5 after reaching a 10-month high of 54.8 in April. The median projection of economists surveyed by Bloomberg News called for a decrease to 53.8 in May. A separate purchasers manufacturing index this morning found strong numbers for May, with the Markit PMI coming in at 54.0, matching estimates.
In other economic reports, consumer spending rose O.3% in April, in-line with forecasts and outpacing income growth while inflation pressures eased to 1.9%, according to the Commerce Department. Incomes increased only just 0.2%, down from a 0.4% pace in March.
Also, U.S. construction spending rose 0.3% in April, matching analysts' estimates, to a seasonally adjusted annual rate of $821 billion, the Commerce Department said Friday. Compared with April 2011, total construction spending is up 6.8%. Spending in March was revised to a 0.3% gain from a prior estimate of a 0.1% increase.
In company news, automakers reported increased U.S. sales gains during May although the growth was not as fast as analysts were expecting. General Motors ( GM:$21.59,00$-0.61,00-2.75%) delivered 245,256 vehicles last month, up 11% from year-ago levels. Sales for Toyota Motor Corp ( TM:$74.94,00$-1.95,00-2.54%) surged 87% to 202,973 vehicles, while Chrysler Group LLC sold 150,041 vehicles for a 30% gain and Nissan rose 21% to 91,794. Analysts, however, were expecting a 15% increase for GM, with Toyota ( TM:$74.94,00$-1.95,00-2.54%) projected for a 93% gain. Chrylser was seen boosting sales 40% and Nissan was expected to produce a 29% advance, according to experts polled by Bloomberg News.
The news was better at Ford Motor Co ( F:$10.165,0$-0.395,0-3.74%) , which sent 215,699 cars and trucks out of showrooms for a 13% gain, beating estimates for a 12% increase. Volkswagen AG grew its sales by 28% to 38,657 vehicle, trailing estimates for a 33% rise. Honda Motor Co ( HMC:$30.87,00$-0.92,00-2.89%) has yet to report, with the car-maker forecast for a 53% year-over-year increase, according to the Bloomberg estimates.
Crude oil prices are continuing their sharp decline with the benchmark July NYMEX contract now off $3.12 at $83.40 a barrel after earlier falling to a session low of $82.56 a barrel this morning. July natural gas is down 8 cents to $2.34 per 1 million BTU. Gold and silver are benefitting somewhat from haven shopping as well as a weaker dollar, with the most active August Gold contract climbing nearly 3.3% to $1,614.50 an ounce, down $50.60. July silver is up 86.3 cents to $28.63 an ounce while July copper is down 3.65 cents to $3.3260 a pound.
Among energy ETFs, the United States Oil Fund is down 3.40% to $31.50 with the United States Natural Gas fund is down 3.04% to $16.28. Among precious-metal funds, the Market Vectors Gold Miners ETF is up 6.92% to $46.81 while SPDR Gold Shares are up 3.32% to $156.66. The iShares Silver Trust is up 3.30% to $27.85.
Here's where the markets stand at mid-day:
NYSE Composite Index down 140.72 (-1.89%) to 7,323.23 Dow Jones Industrial Average down 205.52 (-1.66%) to 12,187.93 S&P 500 down 23.95 (-1.83%) to 1,286.38 NASDAQ Composite Index down 2.15% to 2,766.54 GLOBAL SENTIMENT Nikkei 225 down 1.20% Hang Seng Index down 0.38% Shanghai China Composite Index up 0.05%
FTSE 100 down 1.14% NYSE SECTOR INDICES NYSE Energy Sector Index down 1.79% to 11,006.00 NYSE Financial Sector Index down 2.48% to 4,105.81 NYSE Healthcare Sector Index down 1.28% to 6,952.6548 UPSIDE MOVERS
(+) PIP (+40.4%) Court upholds ruling in company's favor.
(+) BP (+1.6%) to sell stake in Russian venture.
DOWNSIDE MOVERS
(-) QUIK (-22.8%) Prices offering.
(-) VRA (-7.1%) Posts better-than-expected Q1 figures.
Get more news on: | SYMBOLS: | HMC, GM, TM, F, PIP, BP, QUIK, VRA | NEWS TYPE: | Investing Ideas | SECTORS: | Consumer Discretionary, Automobiles, Textiles, Apparel and Luxury Goods, Energy, Oil, Gas and Consumable Fuels, Health Care, Pharmaceuticals, Industrials, Electrical Equipment, Information Technology, Semiconductors and Semiconductor Equipment | |
