The major U.S. index futures are pointing to a lower opening on Friday, with the futures having trimmed much of their early losses following the release of the non-farm payroll employment report for January. The report relayed a mixed message, showing incremental job losses for January compared to expectations for job creation, while the unemployment rate unexpectedly fell. Following the release of the report, commodities have trimmed their losses and the euro has rebounded off its lows against the dollar.
The mixed message may have stalled an outright riot in the markets, although it may not serve to alleviate completely the fears lurking in the minds of traders. Additionally, concerns surrounding debt woes in some of the European nations may continue to weigh on market sentiment.
U.S. stocks began Thursday's session on a markedly negative note, as traders expressed disappointment over a jobless claims report showing an unexpected rise in claims. In reaction to the lackluster jobs data released ahead of the Labor Department's all important monthly non-farm payroll numbers, traders sold off stocks. Negativity surrounding the debt woes in some of the European nations generated additional negative sentiment, sending stocks to their lowest levels in 3 months.
The Dow Industrials ended down 268.37 points or 2.61% at 10,002 and the Nasdaq Composite Index receded 65.48 points or 2.99% to 2,125, while the S&P 500 Index closed at 1,063, down 34.17 points or 3.11%.
Twenty-nine of the thirty Dow components ended the session lower, with Cisco (CSCO) alone bucking the downtrend with a modest advance. Alcoa (AA), Bank of America (BAC), JP Morgan Chase (JPM), Pfizer (PFE), Intel (INTC), Hewlett-Packard (HPQ), General Electric (GE), Disney (DIS) and Caterpillar (CAT) declined sharply in the session.
Among the sector indexes, the NYSE Arca Airline Index slumped 5.58%, the Dow Jones U.S. Basic Materials Average fell 4.52%, the NYSE Arca Oil Index slipped 3.91%, the Philadelphia Oil Service Index ended off 4.61% and the NYSE Arca Gold Bugs Index moved down 5.91%. The Philadelphia Housing Sector Index lost 3.53%, the NYSE Arca Securities Broker/Dealer Index ended down 4.03% and the KBW Bank Index declined 4.31%. In the technology space, the Philadelphia Semiconductor Index dropped 4.64%, while networking, disk drive, hardware, software and Internet stocks also came under selling pressure.
On the economic front, the Labor Department's non-farm payrolls report showed that first time claims for unemployment benefits unexpectedly increased in the week ended January 30th, rising by 8,000 to 480,000. The four-week average rose for the third straight week to 468,750, its highest level since early December.
Meanwhile, non-farm productivity rose by a 6.2% annualized sequential rate in the fourth quarter compared to a 7.2% increase in the previous quarter. Productivity for the whole of 2009 was up 5.1%. Unit labor costs declined at a 4.4% annualized rate in the fourth quarter and fell 2.8% for the whole of the year. The productivity growth was helped mostly by the cost cutting drive of companies. With the number of hours worked rising for the first time since the second quarter of 2007, the labor market may be positioning itself in the path of recovery.
Commodity, Currency Markets
Crude oil futures are edging down $0.01 to $73.12 a barrel after retreating $3.84 to $73.14 a barrel on Thursday. An ounce of gold is currently trading at $1,061.90, down $1.10. The precious metal slumped $49 to $1,063 an ounce in the previous session.
Among currencies, the U.S. dollar is recovering and is trading up at 89.662 yen after it weakened to 89.055 yen at the close of New York trading on Thursday. Against the euro, the dollar is trading at $1.3725 versus yesterday's $1.3723.
Asia
The major Asian markets followed Wall Street lower, ending Friday's session with notable losses. Sentiment was also subdued ahead of the U.S. non-farm payrolls report.
Japan's Nikkei 225 average opened notably lower and moved sideways for the rest of the session, closing down 298.89 points or 2.89% at 10,057, nearly a 2-month low. A majority of the stocks declined in the session. On the other hand, Toyota rebounded, settling up over 1.20%. Nippon Telegraph, Kuraray, Kirin Holdings, Isetan Mitsukosh, Chubu Electric Power, Daiichi Sankyo and Hitachi also showed some strength.
After the markets closed, Panasonic (PC) reported a sharp rise in its operating profit for its fiscal third quarter to 101 billion yen, while sales remained flat at 1.89 trillion yen. The company raised its operating profit forecast for the year ending in March to 150 billion yen from its earlier estimate of 120 billion yen.
Australia's All Ordinaries swooned under the selling pressure generated by the negative lead from Wall Street, which drove traders away from risky assets like commodities. The All Ordinaries settled 111.60 points or 2.40% lower at a 3-month low of 4,533.
On the economic front, the results of a survey released by AIG/Housing Industry Association showed that the performance of construction index rose to 57.7 in January from 49.3 in December. The sub-index measuring activity in the construction sector surged to 59.7 in January from 46.5 in December. The new orders sub-index jumped to 53.5 from 46.1, while the employment sub-index spiked to 59.1 from 52.6. The Reserve Bank of Australia released its quarterly monetary policy statement, which suggested that the central bank may raise rates further. The central bank raised its core inflation rate estimate for 2010 and 2011 premised on strengthening domestic demand, job market and wage growth. The central forecast of the bank showed the Australian economy expanding at a 3.25% rate in 2010 and a faster 3.50% rate in 2011.
Hong Kong's Hang Seng Index opened with a negative gap of over 630 points and moved sideways for the rest of the session. At the close of trading, the index was down 676.56 points or 3.33% at 19,665, its lowest level since September 2nd, 2009.
Europe
The major European markets are trading lower for the third straight session on Friday, with the French CAC 40 Index and the German DAX Index moving down 2.71% and 1.30%, respectively, while the U.K.'s FTSE 100 Index is declining 1.64%.
In corporate news, British Airways reported a pre-tax loss of 342 million pounds in the nine months ended December 31 and a loss of 50 million pounds for the third quarter. The company also said it expects to record a loss for the full year. Meanwhile, caterer Compass' organic revenues fell 1.7% in the first quarter. However, the company said it made a good start to its fiscal year and that its pipeline of businesses remains string.
On the economic front, the French Budget Ministry said France's budgetary deficit came in at 137.99 billion euros in December compared to a deficit of 56.27 billion euros in the same period last year. State spending rose 5.5% year-over-year, while state revenues declined 18.5%.
Meanwhile, the French Customs Office reported that the nation's trade balance showed a deficit of 4.26 billion euros in December compared to a deficit of 4.96 billion euros in the previous month. Economists had expected a more modest deficit of 4 billion euros. Exports remained almost flat with last month, while imports edged down 2.12%.
The U.K.'s producer price inflation report showed that the U.K.'s output prices rose 3.8% year-over-year in January following a 3.5% increase in the previous month. Economists had estimated output price inflation of 3.7%. On a monthly basis, output prices rose 0.4%, bigger than the 0.3% increase estimated by economists. Meanwhile, core output price inflation slowed to 2.5% in January from 2.6% in the previous month. Input prices rose at a 8.4% year-over-year rate in January compared to 7.4% in December, faster than the 6.5% increase expected by economists.
U.S. Economic Reports
The Labor Department reported today that the U.S. economy lost 20,000 jobs in January, with the recent month's job losses taking the total contraction in payroll employment since the recession started in December by 8.4 million. Economists estimated a gain of 15,000 jobs in January.
The change in total non-farm payroll employment for December was revised to -150,000 from the -85,000 estimated earlier. The Labor Department noted that job losses continued in the construction, transportation and warehousing sectors, while employment increased in temporary help services and retail trade.
The unemployment rate based on the household survey fell to 9.7% in January from 10% in December, belying expectations for the rate to have remained unchanged from the December level. Average hourly earnings rose 0.3% in January to result in a 2.5% year-over-year increase.
The U.S. Federal Reserve is expected to release its monthly consumer credit report at 3 PM ET. Consumer credit for December is likely to show a decline of $10 billion.
Consumer credit fell by a record $17.5 billion in November, with revolving credit tied to credit card loans falling by $13.7 billion and non-revolving credit slipping by $3.8 billion. Consumer credit has now been declining for ten straight months.
St. Louis Federal Reserve Bank President James Bullard is slated to speak on monetary policy at Washington University in St. Louis at 5:15 PM.
Earnings
Brooks Automation (BRKS) reported first quarter revenues of $106.2 million, up 44.6% from $73.4 million last year. The company's net loss on an adjusted basis was 2 cents per share. Analysts estimated break-even results on revenues of $94.11 million for the quarter.
Weyerhaeuser Co. (WY) said its fourth quarter net sales from continuing operations fell to $1.46 billion from $1.78 billion last year. The company reported a loss of 83 cents per share, wider than the loss of $5.73 per share in the year-ago period. On an adjusted basis, the company reported a net loss of 52 cents per share compared to a loss of 99 cents per share last year. Analysts estimate a loss of 38 cents per share on revenues of $1.37 billion.
Beazer Homes (BZH) reported first quarter income from continuing operations of $1.09 per share compared to a loss from continuing operations of $2.05 per share last year, while revenues were almost flat at $218.8 million. Analysts estimated a loss of 90 cents per share on revenues of $200.61 million.
Another homebuilder M.D.C. Holdings (MDC) reported fourth quarter net income of $2.68 per share compared to a net loss of $1.92 per share last year. Total revenues rose to $323.9 million, higher than $296.2 million last year.
Aetna (AET) reported operating earnings per share of 40 cents per share, lower than 96 cents per share in the year-ago period. Revenues, excluding net realized capital gains/losses, rose 9% to $8.70 billion. Analysts estimated earnings of 42 cents per share on revenues of $8.65 billion.
Stocks in Focus
Air Products (APD) may react to its announcement that it has made an offer to acquire Airgas (ARG) for $60 per share in cash.
Hain Celestial (HAIN) moved higher in Thursday's after hours session after it said its second quarter sales totaled $241.97 million, lower than $312.22 million last year. The company's earnings rose to 27 cents per share from 20 cents per share last year, with the recent quarter's resulting including charges of 4 cents per share. Analysts' estimates that typically exclude one-time items call for earnings of 31 cents per share on revenues of $253.46 million. The company expects 2010 non-GAAP earnings of $1.05-$1.10 per share and revenues of $920 million to $940 million. The consensus estimates call for earnings of $1.22 per share on revenues of $971.91 million.
Anixter International (AXE) could see some activity after it announced that its board has authorized the buyback of up to 1 million shares.
BioMarin (BMRN) could be in focus after it said it would acquire private and early stage development company Lead Therapeutics. The target company's lead compound, LT-673, is an inhibitor for the treatment of patients with rate, genetically defined cancers. The terms of the agreement calls for BioMarin to pay Lead Therapeutics stockholders an upfront payment of $18 million, an additional $11 million upon acceptance of IND filing for LT-673, which is expected by the end of 2010, and an additional $68 million for the development and launch milestones for LT-673. Separately, BioMarin announced its 2010 guidance, forecasting revenues of $374 million to $405 million compared to the $398.27 million consensus estimate. For 2010, the company expects non-GAAP net income of $39 million to $49 million.
Qiagen (QGEN) could react to an announcement by Pfizer (PFE) that DxS, a wholly-owned subsidiary of Qiagen, has entered into an agreement with Pfizer to develop a companion diagnostic test kit for PF-04948568, an immunotherapy vaccine for the treatment of gliblastoma multiforme. The companies did not reveal the terms of the agreement.
Dun & Bradstreet (DNB) receded in Thursday's after hours session after it reported fourth quarter adjusted earnings of $1.75 per share, lower than $1.87 per share last year. Total revenues fell 3% to $463.7 million. Analysts estimated earnings of $1.75 per share on revenues of $459.01 million. The company also raised its quarterly cash dividend to 35 cents per share from 34 cents per share.
Another stock that could be in focus over a dividend announcement is JB Hunt Transport Services (JBHT), which said its board approved an increase in its quarterly cash dividend to 12 cents per share.
Meanwhile, Marriott (MAR) is expected to see some activity after it announced that its board has authorized the resumption of its dividend payment. The board has declared the issuance of a cash dividend in the amount of 4 cents per share on each share of Class A common stock.
FMC Corp. (FMC) may gain ground after it announced that its fourth quarter net income rose to 85 cents per share from 63 cents per share last year. On an adjusted basis, the company reported earnings of 94 cents per share, lower than $1.02 per share in the year-ago period, as revenues fell 2% to $737.7 million. Analysts estimated earnings of 90 cents per share on revenues of $715.47 million. For 2010, the company expects adjusted earnings of $4.35-$4.75 per share compared to the $4.57 per share consensus estimate.
NetSuite (N) may also be in focus after it reported fourth quarter revenues of $43 million. The company's non-GAAP net income rose to 2 cents per share from 1 cent per share last year. Analysts estimated earnings of 2 cents per share on revenues of $43.03 million.
Sonic (SNIC) could give back some ground after it reported third quarter non-GAAP revenues that remained almost flat at $26.46 million, ahead of the $25.12 million consensus estimate. The company reported a loss of 1 cent per share compared to a loss of $4.27 per share last year. The consensus estimates had called for a loss of 5 cents per share on revenues of $25.12 million.
ResMed (RMD) may rally after it reported that its second quarter revenues rose 23% to $275.1 million. The company's earnings per share climbed 36% to 60 cents per share. Analysts estimated earnings of 55 cents per share on revenues of $259.04 million.
Con-way (CNW) moved to the downside in Thursday's after hours session after it reported a net loss applicable to common shareholders of 4 cents per share compared to a loss of 94 cents per share last year. Revenues were almost flat at $1.12 billion. The consensus estimates called for revenues of $1.08 billion.
Fidelity National Information (FIS) may see some strength after it reported that its fourth quarter adjusted revenues rose 2.7% to $1.32 billion. The company reported adjusted net earnings from continuing operations of 44 cents per share. Analysts estimated earnings of 43 cents per share on revenues of $1.30 billion. For 2010, the company expects 2%-4% growth in adjusted revenues and adjusted earnings of $1.91-$2.01 per share. The consensus estimates had called for earnings of $1.97 per share.
Vertex (VRTX) may advance after it reported fourth quarter revenues of $34.05 million, higher than $32.81 million last year. The company's net loss narrowed to 85 cents per share from a loss of 96 cents per share last year. The non-GAAP net loss was 66 cents per share, narrower than 85 cents per share last year, with the bottom-line results coming in line with expectations.
Edwards Lifesciences (EW) could see weakness after it reported that its fourth quarter adjusted net income rose 6 cents to 84 cents per share, while sales rose 11.9% to $346.7 million. Analysts estimated earnings of 85 cents per share on revenues of $342.95 million. For 2010, the company estimates earnings per share of $3.50-$3.60 on revenues of $1.43 billion to $1.50 billion. The consensus estimates call for earnings of $3.56 per share on revenues of $1.47 billion.
Pitney Bowes (PBI) is likely to see some activity after it reported fourth quarter adjusted earnings from continuing operations of 64 cents per share on a 6% revenue decline to $1.5 billion. The results were ahead of the consensus estimates. The company expects 2010 revenues to be in a range of flat to 3% growth and adjusted earnings per share to be in the range of $2.30-$2.50. Analysts expect a 0.9% increase in revenues and earnings per share of $2.42.
Bebe Stores (BEBE) rallied in Thursday's after hours session after it reported that its second quarter net sales declined 22.2% to $141.5 million. The company's earnings per share fell to 3 cents per share from 8 cents per share last year. Analysts estimated earnings of 1 cent per share on revenues of $144.5 million. For the third quarter, the company expects break-even results to earnings of 5 cents per share, while analysts estimate a loss of 3 cents per share.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.