Equities Reflect Caution Ahead of Jobs Report

by: Midnight Trader

4:22 PM, Aug 5, 2010 --

  • DJIA down 5 (-0.05%) to 10,675
  • S&P 500 down 1 (-0.1%) to 1,126
  • Nasdaq down 10.5 (-0.5%) to 2,293


  • Hang Seng up 0.01%
  • Nikkei up 1.73%
  • FTSE down 0.38%


(+) KSS says July same-store sales up 4.1%, raises earnings view.

(+) VLNC reports improved Q1 from year-ago result.

(+) PCS beats with Q2 results.

(+) HUN easily tops with Q2 results.

(+) HAUP launches high def video support for Windows Media Center.

(+) GPS sales up, guides for earnings below Stret view.

(+) KLIC beats with earnings and guides for sales above Street.

(+) M says July sales up 7.3%.

(+) ANF sales up 7%.

(+) BP up on cap progress.

(+) MF beats with Q1 earnings.

(+) LIZ results mostly positive, misses with revenue.


(-) JCP says same-store sales slip, expects Q2 EPS at low end of

(-) ALXA prices shares.

(-) ARO cuts EPS outlook.

(-) SD down despite earnings beat.

(-) BCS down as earnings about in line.

(-) UN extends European decline to US action after latest earnings.

(-) GYMB sales miss.


Stock averages improve late to end barely down. Wall Street traded in soggy fashion after a surprise rise in weekly jobless benefits applications and mixed retail sales results. Plus, caution persists ahead of Friday's jobs report.

Oil closed down 0.6% though ending off session lows. September futures settled at $82.01 a barrel on the New York Mercantile Exchange. Natural gas for September delivery slumped 3% to close at $4.60 per million British thermal units. Natural gas futures lost grip of earlier gains despite a government report showing a smaller-than-expected increase in inventories for the week ended July 30.

Stocks have gained without much of a pause since hitting lows for the year on July 2. The broad S&P 500 is up 10% since that day.

Earnings news continues to be largely supportive but economic data can be sobering.

The number of people applying for initial unemployment benefits climbed by 19,000 to 479,000 in the latest week. Economists expected a drop in claims. The less-volatile four-week average of initial claims rose by 5,250 to 453,250. The number of workers who continue to receive state unemployment checks, meanwhile, fell by 34,000 to 4.54 million in the week ended July 24, the latest data available.

Economists polled by Reuters are expecting Friday's U.S. Labor Department report to show a drop of 65,000 in non-farm payrolls in July as temporary U.S. Census Bureau jobs dried up. Private employers are expected to have added 90,000 jobs.

Consumers remain one of the bigger question marks in the recovery. Retailers reported July same-store sales results today. The 28 retailers tracked by Thomson Reuters reported July same-store sales rose only 2.9%, short of analysts' expectations for a 3.1% gain.

Costco Wholesale Corp. (NASDAQ:COST) and Limited Brands Inc.(LTD) reported big jumps in July sales, but the gain was deceiving because last year's results were poor. Costco is down 1.83% and Limited is up 0.42%.

In company news, the Android software from Google Inc. (NASDAQ:GOOG) will likely outpace Apple Inc.'s (NASDAQ:AAPL) iPhone in the number of phones in use worldwide by 2012, reports tech industry research firm iSuppli. Android software will likely reside in 75 million smart phones by then while iPhone will be used in 62 million, according to the report.

Drugmakers led by Pfizer Inc. (NYSE:PFE) could soon be able to shrink the amount of time it takes to test a drug's safety by months to years after it, along with other companies, get access to a new testing system, according to Bloomberg. That could add millions of dollars in revenue and savings on research, according to the report. The new system uses computers to test produicts against human and animal cells instead of living organisms and was developed by the federal government, the report says.

The June quarter earnings season rolled from yesterday's after-hours session to this morning before the bell.

Viacom Inc. (NYSE:VIA) is struggling in the red in early trading, down 1.56%, but off its early low of $37.06, after reporting Q2 net income of $420 million, or 69 cents per share, compared with $277 million, or 46 cents per share, last year. Analysts were looking for a consensus 66 cents per share on Thomson Reuters. Overall revenue was flat at $3.3 billion, below analysts' call for $3.4 billion.

Meanwhile, The Gymboree Corp. (NASDAQ:GYMB) reports Q2 sales of $219.3 mln, below the analyst mean of $233 million on Thomson Reuters.

Hartford Financial Services (NYSE:HIG) shares are down sharply on earlier news the seller of life insurance said earnings per share for the year would be $2.10 to $2.30 this year instead of the previous target of $2.70 to $3, according to a Bloomberg report. Second quarter income was $76 million or $0.14 a share compared with a loss of $15 million or $0.06.

Playboy Enterprises (PLA) shares are lower after the company said June quarter losses were wider than expected due to declines in revenue from print and digital segments, according to a Reuters report. Net loss at the company narrowed to $5.4 million, or 16 cents per share, from $8.7 million, or 26 cents per share, a year ago. Still, analysts were expecting a loss of $0.15 a share on sales of $58 million, according to Thomson Reuters.