Stock Market News for May 4, 2012 - Market News
May 04 2012 - 4:06AM
Zacks
A cautious stance by investors
ahead of the Government’s payroll report on top of a mixed bag of
economic reports dragged the benchmarks down for the
second-consecutive day. Additionally, retail bellwethers such as
Target, Macy’s, and Costco reported dismal sales for April, further
dampening investor sentiment. Corporate earnings were also
disappointing, adding to the gloom.
The Dow Jones Industrial Average
(DJI) was down 0.5% to 13,206.59 and further retreaded from its
late-2007 high, a level which had been achieved last Tuesday. The
Standard & Poor 500 (S&P 500) slid 0.8% to finish
yesterday’s trading session at 1,391.57. The tech-laden Nasdaq
Composite Index suffered the most as it plunged 1.2% to close at
3,024.30. Consolidated volumes on the New York Stock Exchange, the
Nasdaq and American Stock Exchange were 6.9 billion shares,
marginally higher than the daily average of roughly 6.76 billion.
Declining stocks easily outpaced the advancers on the NYSE, as for
seven stocks that traded down, only three stocks moved higher.
What weighed on the investors’
sentiment is the apprehension over the nature of nonfarm payroll
data, scheduled for release on Friday. Investors had received a
jolt when, on Wednesday, Automatic Data Processing, Inc.’s
(NASDAQ:ADP) National Employment Report revealed that U.S. nonfarm
private business sector added only 119,000 jobs in April, far lower
than expectations of an addition of 177,000 jobs. Following this
report, expectations took a downturn and it is now believed that
nonfarm payroll data will show additions of 125,000 to 150,000 jobs
as against 170,000 job additions estimated by Reuters.
These apprehensions were further
intensified following a mixed bag of economic data. The Institute
for Supply Management released data suggesting that the massive
U.S. services sector had slowed more than expected for the month of
April. According to the report, the NMI dropped 2.5 percentage
points from March to 53.5% in April. A reading above 50% indicates
expansion for the non-manufacturing components of the economy, but
the drop suggested a slower pace of expansion, even lower than
expectations. Consensus estimates had projected a reading of
55.1%.
The initial claims report was the
only major bright spot yesterday. The U.S. Department of Labor
reported that the advance figure for seasonally adjusted initial
claims had dropped 27,000 from the previous week's revised figure
of 392,000 to 365,000 for the week ending April 28. The sharp
decline in initial claims was higher than consensus estimates of a
drop to 376, 000.
Concerns were not restricted to the
economic data alone as big retailers added to the gloom following a
less-than-expected same-store sales report. Consequently
bellwethers like Costco Wholesale Corporation (NASDAQ:COST), Target
Corp. (NYSE:TGT), Gap Inc. (NYSE:GPS), Saks Incorporated (NYSE:SKS)
dropped 2.8%, 2.5%, 1.6% and 0.9%, respectively. Macy's, Inc.
(NYSE:M) managed gains of 0.7%, but along with Costco, Macy’s April
performance was the worst since 2009.
Corporate earnings failed to
provide any relief with companies including General Motors Company
(NYSE:GM), Cablevision Systems Corporation (NYSE:CVC) and Health
Net, Inc. (NYSE:HNT) releasing disappointing quarterly figures.
Shares of these companies plunged 2.4%, 7.9% and 24.9%,
respectively. Meanwhile, Green Mountain Coffee Roasters Inc.
(NASDAQ:GMCR) suffered the second-largest decline in the Nasdaq
100, dropping 47.8% after missing second-quarter 2012 sales
estimates. This was the company’s second miss in three quarters and
it downwardly revised its fiscal 2012 outlook.
AUTOMATIC DATA (ADP): Free Stock Analysis Report
COSTCO WHOLE CP (COST): Free Stock Analysis Report
CABLEVISION SYS (CVC): Free Stock Analysis Report
GENERAL MOTORS (GM): Free Stock Analysis Report
GREEN MTN COFFE (GMCR): Free Stock Analysis Report
GAP INC (GPS): Free Stock Analysis Report
HEALTH NET INC (HNT): Free Stock Analysis Report
MACYS INC (M): Free Stock Analysis Report
SAKS INC (SKS): Free Stock Analysis Report
TARGET CORP (TGT): Free Stock Analysis Report
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