Economists expected Nonfarm Payrolls to rise by as much as 175,000, so the reading of just 18,000 was a real market disappointment. Even the Unemployment Rate rose to 9.2% as 445,000 lost their jobs in June. This was the weakest jobs report since September 2010. So much for relying on the ADP report that the private sector added 157,000 jobs. Government statistics put that figure at just 57,000. Wholesale Inventories rose by a more than expected 1.8% in May, but sales fell by 0.2%. The Dow Jones Industrial Average opened lower trading down to 12,567.41 on Friday. The NASDAQ traded as low as 2831.16. The daily charts for both the Dow and NASDAQ were overbought. Both the Dow and NASDAQ were positive for the week.
U.S. stocks continued its two week rally on Thursday with the Dow Industrial Average up 93 points to 12,719, up 9.9% year to date and was closing in on its May 2nd intraday high at 12,876.00. The NASDAQ popped another 39 points to 2873 up 8.3% year to date and challenging its May 2nd intraday high at 2887.75. Dow Transports reached an all time high at 5627.85 on Thursday.
Asian stocks were higher on Friday with the Nikkei 225 up 0.7% to 10,138. The Hang Seng was higher by 0.9% to 22,726. European markets fell into the red following the much weaker than expected employment data here in the states. On Friday the FTSE 100 shed 1.0%. The DAX lost 0.9%. The CAC 40 plunged 1.7%. The yield on the 10-Year US Treasury note traded between 3.164 percent and 3.117 on Friday pre-payrolls. Weak payrolls forced this yield to tumble below its 50-day and 200-day simple moving averages at 3.087 and 3.141 to a day’s low yield at 3.007. Gold traded between $1525.0 the Troy ounce and $1532.9 pre-payrolls and above the 50-day simple moving average at $1520.7. Gold popped to $1546.0 on the weak employment data. Crude oil continued to trade between its 200-day simple moving average at $93.60 and its 50-day simple moving average at $99.19. Crude was testing the 50-day pre-payrolls then fell to $95.60 after the weak report. The euro versus the US dollar stayed below its 50-day simple moving average at 1.4366 with a pre-payroll low at 1.4232. After the weak payroll report the 50-day was tested on the upside followed by a decline to a new day’s low at 1.4211.
Private-equity firm Carlyle Group is in talks to acquire Energy Capital, a buyout company focused on investments in power plants and gas pipelines A bipartisan trio of senators, including two from ethanol-producing states, agreed to repeal the $6B/year ethanol tax credit by the end of July. The deal, which must now be passed by Congress, could raise costs for ethanol blenders such as Valero Energy (VLO) and Marathon Oil (MRO), although it's unlikely to reduce demand for corn. CEO Douglas Miller lowered his bid to take Exco Resources (XCO) private to $18.50 a share from $20.50. Cimarex Energy Co (XEC) is raised to Buy from Hold at Stifel Nicolaus. Pioneer Natural Resources (PXD) is now a Buy from Hold at Stifel Nicolaus. ReneSola (SOL) and Yingli Green Energy (YGE) are both reduced to Sell from Neutral at Goldman Sachs.
Energy Select Sector SPDR (XLE) was trading at $76.89 at 4:00 PM on Friday, down 0.84% on the day – up 12.66% year-to-date.
Norilsk Nickel (NILSY) is a new Buy By Societe Generale. Jefferies has new Buys on Nucor (NUE) and Steel Dynamics (STLD) and new Holds on US Steel (X) and AK Steel (AKS). Scotia Capital has Sector Performs on Barrick Gold Corp. (ABX) and Gold Fields Limited (GFI) and has an Outperform on Eldorado Gold (EGO). Fibria Celulose (FBR) is now Neutral from Buy By Goldman.
The Materials Select Sector SPDR (XLB) traded at $40.23 at 4:00 PM on Friday, down 0.75% on the day – up 4.74% year-to-date.
Rockwell Collins (COL) is picked up as an Outperform at Wedbush. In afternoon trading: Shares of Hill International (HIL) are down about 7.9%. Shares of Swisher Hygiene (SWSH) are down about 5.4%. Shares of Kforce (KFRC) are down about 5.2%. Shares of Spirit Airlines (SAVE) are up about 6.2%. Shares of China Ritar (CRTP) are up about 18%.
The Industrial Select Sector SPDR (XLI) traded at $37.82 at 4:00 PM on Friday, down 1.25% on the day – up 8.46% year-to-date.
The average vacancy rate at large U.S. shopping malls increased to 9.3% in Q2 from 9.1% in Q1, the highest level in 11 years. U.K. PM David Cameron said a decision whether to allow News Corp. (NWS) to take over BSkyB (BSYBY) will take "some time" because of the number of responses to a public consultation. Pandora Media (P) is started as a Sell at Gilford Securities. Capstone covers PF Chang’s (PFCB) with a Buy and $46.50 target and has a Hold on Ruby Tuesday (RT). MGM Resorts (MGM) is initiated with an Outperform and $16 target at Credit Agricole. TJX Cos. (TJX) is raised to Hold from Sell at Citigroup. In afternoon trading: Shares of Autoliv (ALV) are down about 9.5% after reporting its operating results and cash flows could be affected by the outcomes of ongoing U.S. and European antitrust investigations. Shares of Dick’s Sporting Goods (DKS) are down about 6.9%. Shares of TRW Automotive Holdings (TRW) are down about 6.5%.
The Consumer Discretionary Select Sector SPDR (XLY) traded at $41.37 at 4:00 PM on Friday, down 0.60% on the day – up 10.59% year-to-date.
In afternoon trading: Shares of Farmer Brothers (FARM) are up about 8%. Shares of WD-40 (WDFC) are up about 5.3%. Actives: Shares of Archer Daniels Midland (ADM) are up about 1.1%. Shares of Kraft Foods (KFT) are down about 0.75%. Shares of Altria Group (MO) are down about a half of a percent. Shares of Procter & Gamble (PG) are down about 0.3%. Shares of Wal-Mart (WMT) are down about 1.1%.
The Consumer Staples Select Sector SPDR (XLP) traded at $31.74 at 4:00 PM on Friday, down 0.35% on the day – up 8.29% year-to-date.
Geron Corp (GERN) is a new Overweight at JPMorgan. Sanofi-Aventis (SNY) is moved to Outperform from Market Perform by Sanford Bernstein. MedAssets (MDAS) gets moved to Outperform from Neutral with an $18 target at brokers Robert Baird. Immucor (BLUD) is now Neutral from Outperform by Baird with a target of $27. In afternoon trading: Shares of Biosante (BPAX) are up about 9.1%. Shares of Geron are up about 8%. Shares of Pharmacyclics (PCYC) are up about 7.2%. Shares of Arena (ARNA) are up about 6.3%. Shares of Zalicus (ZLCS) are DOWN about 5.5%.
The Health Care Select Sector SPDR (XLV) traded at $35.78 at 4:00 PM on Friday, down 0.45% on the day – up 13.59% year-to-date.
Deutsche Bank (DB) may name Anshu Jain, the firm's investment-banking head, as co-CEO alongside a German-speaking board member to succeed Josef Ackermann. PacWest Bancorp (PACW) is resumed as a Buy at Roth Capital. Starwood Property Trust (STWD) is a new Outperform at Keefe Bruyette. Bank of Montreal (BMO) is begun with an Outperform and $69 objective by BMO Capital. Commerzbank AG (CRZBY) is upgraded to Buy from Sell at Societe Generale. Banco Santander (STD) is now Underperform from Market Perform by Bernstein. StanCorp Fin (SFG) is downgraded to Hold from Buy at Wunderlich. In afternoon trading: Shares of Paulson Capital (PLCC) are up about 13.6%.
The Financial Select Sector SPDR (XLF) traded at $15.46 at 4:00 PM on Friday, down 1.28% on the day – down 3.07% year-to-date.
AOL Inc. (AOL) is begun with a Buy at brokerage B. Riley. Motorola Mobility (MMI) is a new Neutral with a $23 price target at Robert Baird. JDA Software (JDAS) is a new Buy and $40 price objective at Benchmark. Western Digital (WDC) is upgraded to Outperform from Sector Perform at FBN Securities. JinkoSolar Holding (JKS) is upgraded to Buy from Sell at Goldman. Google (GOOG) is cut to Equalweight from Overweight at Morgan Stanley. Intel Corp (INTC) is cut to Hold from Buy at Standpoint Research. ReneSola (SOL) and Yingli Green Energy (YGE) are both reduced to Sell from Neutral at Goldman Sachs. MEMC Electonics (WFR) is taken to Neutral from Buy at Ticonderoga. In afternoon trading: Shares of Local.com (LOCM) are up about 14.5%. Shares of FriendFinder Networks (FFN) are up about 9.5%.
The Technology Select Sector SPDR (XLK) traded at $26.47 at 4:00 PM on Friday, down 0.49% on the day – up 5.08% year-to-date.
In afternoon trading: Shares of TerreStar (TSTRQ) are down about 24%. Actives: Shares of Level 3 (LVLT) are down about 2.3%. Shares of Sprint Nextel (S) are down about 3.4%. Shares of AT&T (T) are down about 0.4%. Shares of Verizon (VZ) are relatively unchanged. Shares of Frontier (FTR) are relatively unchanged.
The NASDAQ Telecommunications Index (IXTC) traded at $217.00 at 4:00 PM on Friday, down 0.76% on the day – down 3.71% year-to-date.
In afternoon trading: Actives: Shares of Genon Energy (GEN) are up about 2.75%. Shares of Duke Energy (DUK) are relatively unchanged. Shares of Exelon (EXC) are down about a half of a percent. Shares of AES Corp (AES) are down about a half of a percent. Shares of Edison International (EIX) are up about 0.8%.
The Utilities Select Sector SPDR (XLU) traded at $33.76 at 4:00 PM on Friday, down 0.38% on the day – up 7.72% year-to-date.
STOCKS: VLO, MRO, XCO, XEC, PXD, SOL, YGE, NILSY, NUE, STLD, X, AKS, ABX, GFI, EGO, FBR, COL, HIL, SWSH, KFRC, SAVE, CRTP, NWS, BSYBY, P, PFCB, RT, MGM, TJX, ALV, DKS, TRW, FARM, WDFC, ADM, KFT, MO, PG, WMT, GERN, SNY, MDAS, BLUD, BPAX, PCYC, ARNA, ZLCS, DB, PACW, STWD, BMO, CRZBY, STD, SFG, PLCC, AOL, MMI, JDAS, WDC, JKS, GOOG, INTC, WFR, LOCM, FFN, TSTRQ, LVLT, S, T, VZ, FTR, GEN, DUK, EXC, AES, EIX
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