Stock Market News for June 3, 2011 - Market News
June 03 2011 - 4:06AM
Zacks
A volatile day of trading came to a close with benchmarks ending in
the red and as it stands there are now clear signs of markets
heading into a fifth consecutive week of losses. Investors
refrained from betting big ahead of the crucial jobs report from
the Labor Department, which will likely add to concerns about a
slowing economy.
Markets had initially
garnered some gains, but these were soon washed out as investors
remained worried about the jobs report. The Dow Jones Industrial
Average (DJIA) had dropped 100 points in the mid-session but
finally recovered to end at 12,248.55, dropping 41.59 points or
0.3%. The Dow is most likely en route to its fifth straight week of
losses, the first time since July 23, 2004. The Standard & Poor
500 (S&P 500) declined 0.1% to close at 1,312.94 and the Nasdaq
Composite Index was down to 2,773.31, shedding 0.2%. On the New
York Stock Exchange, AMEX and Nasdaq, consolidated volumes were 7.2
billion shares, below last year's daily average of 8.47 billion
shares. For every seven shares that climbed up on the NYSE, eight
stocks declined.
For several days now,
investors have not been greeted with any positive economic data
that could have significantly lifted their sentiments. A day after
Automatic Data Processing’s (ADP) Employment Services reported
slowing growth in U.S. private-sector payrolls for May, the Labor
Department reported initial claims higher than estimates. The
report failed to lift investor sentiment and the markets continued
to be dampened by economic weakness.
According to the U.S.
Department of Labor: “In the week ending May 28, the advance figure
for seasonally adjusted initial claims was 422,000, a decrease of
6,000 from the previous week's revised figure of 428,000. The
4-week moving average was 425,500, a decrease of 14,000 from the
previous week's revised average of 439,500.” The Consensus forecast
for seasonally adjusted initial claims was 416,000.
This report comes a day ahead
of the important non-farm payroll data to be released by the
government. The Consensus for the current period is an addition of
188,000 jobs. Total non-farm payrolls account for approximately 80%
of the workers who produce the entire gross domestic product of the
United States. The non-farm payroll statistic assists government
policy makers and economists to determine the current state of the
economy and predict future levels of economic activity. Investors
are keep their fingers crossed and expect a positive report this
time that could lift the markets from the prevailing
weakness.
In a similar development, the
U.S. Census Bureau’s report on factory orders indicated weakness in
the economy. According to the Commerce Department: “New orders for
manufactured goods in April, down two of the last three months,
decreased $5.5 billion or 1.2 percent to $440.4 billion. This
followed a 3.8 percent March increase. Excluding transportation,
new orders decreased 0.2 percent”. The department also stated: “New
orders for manufactured durable goods in April, down two of the
last three months, decreased $7.1 billion or 3.6 percent to $190.3
billion, unchanged from the previously published decrease. This
followed a 4.6 percent March increase. Transportation equipment,
also down two of the last three months, had the largest decrease,
$4.8 billion or 9.3 percent to $46.9 billion”.
On a sectoral basis, higher
gas prices combined with weak economy adversely affected the
retailers in May. Consumer staples led the declines in the S&P
500 and shares of Wal-Mart Stores Inc. (NYSE:WMT) led the declines
in the Dow, dropping 1.4%. Other decliners included, J. C. Penney
Company, Inc. (NYSE:JCP), Target Corp. (NYSE:TGT), Limited Brands,
Inc. (NYSE:LTD), Pepsico, Inc. (NYSE:PEP), The Coca-Cola Company
(NYSE:KO) and Macy's, Inc. (NYSE:M), and they shed 2.7%, 1.3%,
2.2%, 1.1%, 1.1% and 0.9%, respectively.
After reports came in that New York City’s top prosecutor was
subpoenaing The Goldman Sachs Group, Inc. (NYSE:GS), the financial
major’s shares slid 1.3% as did the other bellwethers in the
financial sector. Among stocks that declined were Morgan Stanley
(NYSE:MS), JPMorgan Chase & Co. (NYSE:JPM) and American
International Group, Inc. (NYSE:AIG) and they shed 0.5%, 0.4% and
0.1%, respectively.
AMER INTL GRP (AIG): Free Stock Analysis Report
GOLDMAN SACHS (GS): Free Stock Analysis Report
PENNEY (JC) INC (JCP): Free Stock Analysis Report
JPMORGAN CHASE (JPM): Free Stock Analysis Report
COCA COLA CO (KO): Free Stock Analysis Report
LIMITED BRANDS (LTD): Free Stock Analysis Report
MACYS INC (M): Free Stock Analysis Report
MORGAN STANLEY (MS): Free Stock Analysis Report
PEPSICO INC (PEP): Free Stock Analysis Report
TARGET CORP (TGT): Free Stock Analysis Report
WAL-MART STORES (WMT): Free Stock Analysis Report
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