The highly anticipated nonfarm payroll report reaffirmed the worst fears for investors. Stagnant job growth shows that the economy is still stuck in a prolonged rut and the dangers of a recession are intensifying. That nation’s unemployment rate stayed flat at 9.1 percent while the number of hours worked and pay didn’t see any growth either. The dismal jobs report adds further speculation that the Federal Reserve will be forced to act in order to combat recessionary forces. One such move at the Fed’s disposal is known as Operation Twist, in which the U.S. central bank will sell shorter-term Treasuries and buy long-term bonds. Financial stocks are also getting hammered today as the Federal Housing Finance Agency, which manages Fannie Mae (FNMA) and Freddie Mac (FMCC), said it plans to sue major banks like Bank of America (BAC), JPMorgan Chase (JPM), Goldman Sachs (GS), and Deutsche Bank (DB) for failing to conduct proper due diligence on bad mortgages. In commodities, oil prices drop over 2 percent as investors once again worry that economic decline means lower demand. Gold prices moved up over 2 percent.
Major U.S. Stock Indices
DJIA: 11,288.24 (-1.79 percent)
S&P 500: 1,179.35 (-2.08 percent)
NASDAQ: 2491.79 (-2.13 percent)
Russell 2000: 691.98 (-2.39 percent)
In other news:
- Negotiations between Netflix (NFLX) and Starz have broken down. The premium cable content provider had played a major part in Netflix’s video streaming success, but an asking price that was 10x more than the previous contract was more than the video-by-mail company was willing to pay. [Marketwatch]
- Google’s (GOOG) major acquisition of Motorola Mobility (MMI) received a lot of attention for the patents it was getting, but no one really said anything about the actual products. [Bloomberg]
- Americans should be putting more accountability of the current economic malaise on politicians and government officials. [CNBC]
- High net worth investors are selling gold and buying high-end art instead as a way to preserve their wealth. Could an ETF focused on rare paintings be on the horizon? [Reuters]
- The top jobs creators right now are retailers like Staples (STPL) and Taco Bell, owned by Yum! Brands (YUM), and the military. [The Street]
Check back for other news.