For Immediate Release
Chicago, IL – December 7, 2009 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Monster (MWW), Wal-Mart Stores Inc. (WMT), GameStop Corp. (GME), Amazon.com Inc. (AMZN) and Target Corp (TGT).
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Here are highlights from Friday’s Analyst Blog:
Unemployment Report – WOW!
That’s the first word that comes to mind — wow! The Employment Report from the Bureau of Labor Statistics (BLS) was far better than expected, with a loss of only 11,000 jobs in November. Consensus expectations were for the employment report to show a loss of 125,000 jobs for the month.
The good news does not stop there. The unemployment rate fell to 10.0% from 10.2% last month, and is half-way back to the 9.8% level in September, according to the employment report.
In addition to the lower-than-expected employment report numbers for November, the job losses for both October and September were revised sharply lower. As of last month we thought we had shed 190,000 jobs in October — now we find out that the economy “just” lost 111,000. We thought we had lost 219,000 in September, but now we find out that we “only” lost 139,000 jobs.
Add the revisions to the surprise for this month to the employment report, and we have 273,000 more jobs in the economy than we thought we had as of last night. That is very good news.
When business starts to pick up, the first thing a company is going to do is restore the hours of its existing workers that have been cut back. It is good for morale, and it is also less costly to the employer than hiring new people since most of the time-benefit costs are the same if a worker is working 35 hours a week instead of 33 hours a week. The cost savings are much smaller, and sometimes non-existent if the employer has to pay time and a half overtime rates. So if employers see that they are having to pay a lot of overtime, it is time to start posting positions on Monster (MWW).
Wal-Mart Poses Challenge for GME
Wal-Mart Stores Inc. (WMT) recently announced that it is lowering the prices of 25 of the most popular video games. The company intends to lower prices by about 15% to 20% by Christmas Eve. This announcement has been a major worry for the world’s largest video game and entertainment software retailer GameStop Corp. (GME).
In response, GameStop Corp., which generates the bulk of its sales during the holiday season, will be forced to reduce prices of its games to stay competitive. Moreover, according to market sources, most of GameStop’s stores are near Wal-Mart outlets, thereby posing a much tougher competition for GameStop in terms of attracting customers.
Wal-Mart’s decision to cut video game prices this holiday season is a strategy to take advantage of the sector’s popularity as gifts. According to NPD Group, games are not expected to do as well this year as the year before, when Americans spent more than $21 billion on game software, hardware and accessories. Moreover, this year there have been fewer hit games and the recession has led customers to be more selective about the games they buy.
Wal-Mart lowered prices on video games such as Halo 3:ODST and Left 4 Dead 2. In addition, the company is also running a promotion from Dec 5 through Dec 12, offering a gift card worth $50 to customers who buy the $199 Wii game console.
However, GameStop’s website yesterday declared that Left 4 Dead 2 will now be sold for $39.99, down from $59.99 earlier. Halo 3: ODST is also being offered at $39.99, down from $49.99 quoted earlier.
These GameStop prices are lower than the $50 that Wal-Mart is charging for the games. But other games, such as Mario & Sonic at the Olympic Winter Games, are cheaper at Wal-Mart, neither is GameStop offering a gift card for a Wii purchase.
Games are not the only category that Wal-Mart is offering discounts on; even online, the company has been offering discounts on books and DVDs to compete with companies such as Amazon.com Inc. (AMZN) and Target Corp (TGT).
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