Nonfarm Payrolls increased by a less than expected 115,000 in April, but with upward revisions for February and March the net was a gain close to the 175,000 consensus. The labor force shrunk by 522,000 bringing the Unemployment Rate down to 8.1%. This forced the labor force participation rate down to just 63.6 from 63.8 in March. The Dow Industrial Average traded down to 13,022.34 trending below its year-to-date high set at 13,338.66 on May 1st. The NASDAQ traded down to 2957.21 staying well below its March 27th high at 3134.17.
Asian stocks were lower on Friday. The Nikkei 225 was closed again at 9,380. The Hang Seng ended their session at 21,086 – down 0.77% on the day. European exchanges traded lower on Friday. The FTSE 100 ended their session at 5,655 – down 1.93% on the day. The DAX ended their session at 6,561 – down 1.99% on the day. The CAC 40 ended their session at 3,162 – down 1.90% on the day. The yield on the 10-Year US Treasury traded between 1.922 percent and 1.940 pre-employment data then rose slightly to 1.956 before declining to 1.872, well below its 50-day and 200-day simple moving averages at 2.075 and 2.061.
Gold declined from $1637.9 the Troy ounce to $1626.8 then rebounded to $1648.0 well below the 50-day and 200-day simple moving averages at $1667.9 and $1698.7. Crude oil traded down from $102.72 per barrel to $97.51 well below its 50-day simple moving average at $105.01 and approaching its 200-day at $96.34. The euro versus the dollar traded up to 1.3176 then down to 1.3088 below its 50-day simple moving average at 1.3198.
Energy
TransCanada (TRP) will reapply for Presidential approval of the section of the Keystone pipeline that crossed the Canadian border. The route through has been altered for environmental issues. Spectra Energy (SE) missed Q1 EPS estimates by a penny with weaker than expected revenue. Dow components – Chevron (CVX) – down 2.1%, Exxon Mobil (XOM) down 1.1%.
Energy Select Sector SPDR (XLE) was trading at $68.36 at 3:30 PM on Friday, down 2.20% on the day – down 1.11% year-to-date.
Materials
Haynes International (HAYN) beat FQ2 EPS estimates by nineteen cents with a miss on the revenue line. Eldorado Gold (EGO) reported Q1 EPS of eleven cents with a miss on the revenue line. CF Industries (CF) beat Q1 EPS estimates by 67 cents with better than expected revenue. The company forecasts higher expected corn planting, tight nitrogen supply and favorable natural gas prices to provide a positive 2012. Dow components – Alcoa (AA) down 2.1%, DuPont (DD) down 0.7%.
The Materials Select Sector SPDR (XLB) was trading at $35.66 at 3:30 PM on Friday, down 1.74% on the day – up 6.45% year-to-date.
Industrials
United Airlines (UAL) appears ready to order 100 Boeing (BA) 737 planes worth as much as $10 billion and could potentially increase to 200 planes. ITT Industries (ITT) beat Q1 EPS estimates by eight cents with better than expected revenue. Manitowoc (MTW) missed Q1 EPS estimates by eight cents with a miss on the revenue line. Dow components – Boeing Co (BA) down 1.2%, Caterpillar (CAT) down 2.3%, General Electric (GE) down 1.0%, 3M Company (MMM) down 0.9%, United Technologies (UTX) down 1.4%.
The Industrial Select Sector SPDR (XLI) was trading at $36.28 at 3:30 PM on Friday, down 1.49% on the day – up 7.50% year-to-date.
Consumer Discretionary
Warnaco Group (WRC) missed Q1 EPS estimates by six cents on revenue of $615.5 million, down 7.1% year over year. MGM Resorts (MGM) plans to build a $2.5 casino in Cotai give approval from the Macau government. Whole Foods Market (WFM) gets upgraded to Overweight by JP Morgan after beating firm’s FQ2 earnings. Dunkin’ Brands (DNKN) will add 80 Baskin-Robbins in the U.K. over the next 3 years. LeapFrog Enterprises (LF) beat Q1 EPS estimates by twelve cents with better than expected revenue. Dow Components – Disney (DIS) down 1.9%, Home Depot down 1.1%, McDonalds (MCD) down 0.9%.
The Consumer Discretionary Select Sector SPDR (XLY) was trading at $44.91 at 3:30 PM on Friday, down 1.94% on the day – up 15.09% year-to-date.
Consumer Staples
A California pension fund sues the Wal-Mart (WMT) board for mishandling the allegations about the bribery scandal in Mexico and its cover up. Speculation that Coca-Cola (KO) will buy Monster Beverage (MNST) continues Stifel Nicolaus saying a KO-MNST deal still makes sense due to distribution savings. Estee Lauder (EL) beat FQ3 EPS estimates by a nickel with in-line revenue. PepsiCo (PEP) is working on an alliance Tingy Holdings in China to help sales in the nation. Dole Foods (DOLE) quarterly results were below expectations on a slump in core earnings because of hedging losses. Kraft (KFT) beat Q1 EPS estimates by a penny with better than expected revenue. Dow components – Kraft (KFT) down 0.5%, Coca Cola (KO) down 0.2%, Procter & Gamble (PG) flat, Wal-Mart (WMT) down 0.2%.
The Consumer Staples Select Sector SPDR (XLP) was trading at $34.12 at 3:30 PM on Friday, down 0.67% on the day – up 5.02% year-to-date.
Health Care
Targacept (TRGT) beats Q1 EPS estimates by 32 cents on revenue of $22.9 million down 41% year over year. Alexza (ALXA) was down 34.4% premarket after announcing that its new drug application for Adasuve, a schizophrenic and bipolar disorder treatment, cannot be approved by the FDA until a deficiency at a manufacturing facility is resolved. Synergy Pharmaceuticals (SGYP) was down 22.7% premarket after announcing that the company witll offer ten million shares of common stock at $4.50 / share to fund research and development activities, including clinical trials of its plecanatide and SP-333 for treatment of gastrointestinal disorders. Warner Chilcott (WCRX) beat Q1 EPS estimates by seventeen cents but missed on the revenue line. Dow Components – Johnson & Johnson (JNJ) down 0.5%, Merck (MRK) down 1.2%, Pfizer (PFE) down 1.0%.
The Health Care Select Sector SPDR (XLV) was trading at $36.98 at 3:30 PM on Friday, down 1.23% on the day – up 6.60% year-to-date.
Financials
Fed supervisors are pressuring bank such as BNY Mellon (BK) and JPMorgan (JPM) to reduce exposures to the risky $1.7 trillion market for tri-party repos. Goldman (GS) is said to be planning to develop a new bond trading platform to lower fees on typical bond trades. Bank of America (BAC) is reportedly preparing to discuss with lawyers who represent above 1,000 former Merrill Lynch brokers over the claim that the bank owes the brokers deferred compensation that could run into the millions. St. Joe Company (JOE) missed Q1 EPS estimates by four cents with revenue of $30.5 million, down -58% year over year. JP Morgan (JPM) has been downgraded to Underperform from Outperform by CLSA, as influential banking analyst Mike Mayo cites increased US macro uncertainty and political issues in Europe. Dow Components – American Express (AXP) down 1.0%, Bank of America (BAC) down 3.2%, JP Morgan Chase (JPM) down 2.6%, Travelers (TRV) down 0.9%.
The Financial Select Sector SPDR (XLF) was trading at $15.09 at 3:30 PM on Friday, down 1.63% on the day – up 16.08% year-to-date.
Information Technology
Sapient (SAPE) missed Q1 EPS estimates by two cents with in-line revenue. Power-One (PWER) reported Q1 EPS of three cents with a beat on the revenue line. Pegasystems (PEGA) missed Q1 EPS estimates by a nickel with in-line revenue. ManTech International (MANT) missed Q1 EPS estimates by nine cents with a miss on the revenue line. Limelight Networks (LLNW) missed Q1 EPS estimates by a penny with in-line revenue. j2 Global Communications (JCOM) beat Q1 EPS estimates by two cents with in-line revenue. International Rectifier (IRF) beat FQ3 EPS estimates by fourteen cents. Dow Components – Cisco Systems (CSCO) down 3.1%, Hewlett-Packard (HPQ) down 0.9%, IBM (IBM) down 0.9%, Intel Corp (INTC) down 2.0%, Microsoft (MSFT) down 2.0%.
The Technology Select Sector SPDR (XLK) was trading at $29.10 at 3:30 PM on Friday, down 1.99% on the day – up 14.34% year-to-date.
Telecommunication Services
United States Cellular (USM) beat Q1 EPS estimates by 29 cents with in-line revenue. Telephone and Data Systems (TDS) reported Q1 EPS of 48 cents with in-line revenue. Cincinnati Bell (CBB) missed Q1 EPS estimates by a penny on improved revenue. Dow components – AT&T (T) down 0.6%, Verizon (VZ) down 0.7%.
The NASDAQ Telecommunications Index (IXTC) was trading at $202.33 at 3:30 PM on Friday, down 2.35% on the day – up 2.74% year-to-date.
Utilities
Ameren (AEE) beat Q1 EPS estimates by a penny with in-line revenue. Pepco Holdings (POM) beat Q1 EPS estimates by six cents but missed on the revenue line. Exelon (EXC) beat Q1 EPS estimates by a nickel. Duke Energy (DUK) beat Q1 EPS estimates by a penny with in-line revenue. Northwest Natural Gas (NWN) missed Q1 EPS estimates by a penny with a miss on the revenue line. Alliant Energy (LNT) missed Q1 EPS estimates by fourteen cents with a miss on the revenue line. AES Corp beat Q1 EPS estimates by ten cents with a beat on the revenue line. National Fuel Gas Company (NFG) reported in-line Q1 EPS but missed on the revenue line. Consolidated Edison (ED) missed EPS estimates by a dime. Dominion Resources (D) up 0.5%, Edison International (EIX) up 0.4%, First Energy (FE) up 0.15%, PG&E Corp (PCG) up 0.3%, Southern Company (SO) up 0.7%.
The Utilities Select Sector SPDR (XLU) was trading at $35.58 at 3:30 PM on Friday, up 0.17% on the day – down 1.11% year-to-date.
STOCKS: CVX, XOM, TRP, SE, AA, DD, HAYN, EGO, CF, BA, CAT, GE, MMM, UTX, UAL, ITT, MTW, DIS, HD, MCD, WRC, MGM, WFM, DNKN, KFT, KO, PG, WMT, MNST, EL, PEP, DOLE, JNJ, MRK, PFE, TRGT, ALXA, SGYP, WCRX, AXP, BAC, JPM, TRV, BK, GS, JOE, CSCO, HPQ, IBM, INTC, MSFT, SAPE, PEGA, PWER, MANT, LLNW, JCOM, T, VZ, USM, TDS, CBB, D, EIX, FE, PCG, AEE, POM, DUK, NWN, LNT, AES, NFG, ED
