As a new earnings season gets underway, fresh worries about the economy are resurfacing, keeping traders on toes and, as a result, stocks are edging lower. Although broader economic worries are in place, the lingering weakness in jobs market remains a sore throat and Wednesday’s ADP report did not help soothe those worries. There are concerns today’s jobs report might disappoint.
On Thursday stocks got an initial boost from a Labor Department report that showed an unexpected drop in initial jobless claims. However, the excitement quickly faded as traders chose to proceed with caution. A better-than-expected September retail sales report failed to spur sentiments either. The Dow industrials came within striking distance of the 11,000 mark but retreated to close at 10948.58. Alcoa was the leading decliner on the Dow average, closing off 1.4%, ahead of its third-quarter results.
This morning the Labor Department announced that the economy lost 95,000 jobs in September, well above expectations. Unemployment rate, however, remained unchanged at 9.6%. The announcement sent stocks futures lower but expectation the report would pave the way for further quantitative easing measures have sent the future off their lows.
The broader Standard & Poor’s 500-stock index closed down nearly 2 points, or 0.2%, at 1158.06. Of the ten S&P 500 industry sectors, material and telecommunication sector shares led on the downside. The tech-heavy Nasdaq Composite index edged up nearly 3 points, or 0.1%, to 2383.67. Declining issues were ahead of advancing ones by a narrow margin.
After the markets closed yesterday, Alcoa (NYSE:AA) reported better-than-expected quarterly earnings and revenue. Although weak metal prices had a bearing on Alcoa’s numbers, the company managed to surprise the Street. Alcoa reported adjusted earnings of 9 cents a share, beating estimates of 5 cents a share.
Meanwhile, shares in Adobe (NASDAQ:ADBE) shot up 12% after a report in the New York Times said Chief Executive Shantanu Narayen had held talks with Microsoft (NASDAQ:MSFT) CEO Steve Ballmer. The report said the discussion centered on many topics, including a possible merger.
Gold prices lost some shine Thursday, turning in their largest since-session drop since July, off $12.70 to $1335. Crude prices also eased, down $1.56 to $81.67.
The stream of retail sales numbers also pointed to an improved holiday selling season, even as promotional activities ate into profits. Abercrombie & Fitch (NYSE:ANF), up 10.1%, was the leading gainer on the S&P500 after reporting an estimate-topping sales jump of 25% in September, and a 13% increase in comparable sales. On the downside, Marriot (NYSE:MAR) topped the S&P500’s list of declining shares, off 6.3%, after posting disappointing third quarter earnings that missed Street estimates by a penny.
After a four-day holiday break, the Shanghai Composite index played catch up with its Asian counterparts and closed up 3.1% today. Moody’s (NYSE:MCO) also said it may upgrade the country’s sovereign debt rating.
ALCOA INC (AA): Free Stock Analysis Report
ADOBE SYSTEMS (ADBE): Free Stock Analysis Report
ABERCROMBIE (ANF): Free Stock Analysis Report
MARRIOTT INTL-A (MAR): Free Stock Analysis Report
MOODYS CORP (MCO): Free Stock Analysis Report
MICROSOFT CORP (MSFT): Free Stock Analysis Report
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