You would think that the jobs data we got today would’ve sparked a monster rally. But we also got some weak guidance that made investors a bit more sceptical. Nevertheless, the 2012 rally continues.
First, the scoreboard:
Dow: 12,415.7, -2.7, -0.0%
S&P 500: 1,281.1, +3.8, +0.3%
NASDAQ: 2,669.9, +21.5, 0.8%
And now, the top stories:
- A quick note on Europe: they’re still having problems with their debt situation, and we’re starting to sound like a broken record. Italy’s still having problems. Hungary’s having huge problems, which could turn into Austria’s problems. European stock markets sank and the euro fell to $1.28 for the first time since September 2010.
- We got a string of encouraging jobs data this morning. First, came layoff data from Challenger grey & Christmas. The firm said employers announced 41,785 layoffs in December, down 1.6% from November. The government and financials led layoffs. ADP said the US added 325k private sector jobs in December, crushing economists’ expectation for 178k. This is a positive indicator of how tomorrow’s BLS jobs number should look. To round things out, initial jobless claims came in at 372k, down from last week’s 387k reading and better than economists’ estimate of 375k. The futures roared higher on all the good news. This Is What Will Happen In America In 2012 >
- Early in the trading session, we learned that the ISM non-manufacturing index, a reading on the services sector, came in at 52.6, shy of the expectation for 53.0. It wasn’t a major miss, but it wasn’t great news for the stock market that was selling off early in the trading session. Despite the good jobs data, today’s trading session seemed tempered by some discouraging outlooks issued by various companies.
- National retail chains announced their December same-store sales, but the read out of many retailers fell short of expectations. Gap and Koh’ls announced disappointing December results, and Target and JC Penney gave weak guidance.
- Oil refiners plunged today despite a relatively modest pull back in energy prices today. Refining giant Tesoro warned that it would report a Q4 net loss of around $0.55 to $0.80 per share. Management blamed shrinking refining margins, which is essentially the difference between he cost of crude oil and the price of the refined product they sell.
- Barnes & Noble plummeted after slashing guidance. The company now expects an net loss of $1.40 to $1.10 per share on revenue of $7 to $7.2 billion. Analysts were expecting a $0.63 per share loss on $7.33 billion. Management blamed disappointing sales of its e-reader Nook.
- Drug giant Eli Lilly slashed its full year EPS forecast to a range of $3.10 to $3.20, which was far short of analyst estimate of $3.67. Management blamed the patent expirations of some key drugs.
- Elsewhere in the healthcare market, shares for biotech company Dendreon spiked, triggering market circuit breakers and causing the stock to be halted temporarily. Management surprised investors by saying Q4 revenue soared 230% year-over-year to $82 million on the strength of its cancer drug Provenge.
- Another small but well-known name that rallied today was SodaStream. The beverage machine seller announced a new deal with Kraft Foods to sell some brand-name beverages including Crystal Light and Country Time.
- Big banks soared today on no obvious news. Bank of America was a big winner today. Some attribute it to rumours of some sort of newfangled refinancing plan coming from Washington.
- Don’t Miss: BLACKROCK SEES 2012 MIRACLE: Stocks Will Rise While Earnings Disappoint!