Stocks bounced off the lows of the day and climbed into the green near the close.
First, the scoreboard:
- Dow: 17,769.42, +2.87, (0.02%)
- S&P 500: 2,080.92, +1.64, (0.08%)
- Nasdaq: 5,014.93, -6.69, (-0.13%)
And now, the top stories on Tuesday:
- Bonds sold off again. The yield on the benchmark 10-year note reached an eight-month high of 2.45%. The price of the long 30-year bond also fell, and its yield rallied to about 3.18%, also the highest in eight months. German bund yields also spiked, with the 10-year going as high as 0.969%.
- Job openings surged to the highest on record in April. The Job Openings and Labour Turnover survey showed that openings surged to 5.376 million, more than the expectation for 5.044 million. This was the highest level in any month for the series since it began in December 2000. The number of separations fell in April to 4.881 million from 5.065 million in March. The quits rate, seen as an indicator of employee confidence, also fell slightly in April to 1.9% from 2% in March. In a note after the data release, Barclays economists wrote, “on balance, we read the April JOLTS data as suggesting labour market momentum remains intact in Q2 and labour market slack continues to diminish.”
- The latest small business report from the National Federation of Independent Business showed that the optimism index rose to 98.3 in May. The NFIB had some really bullish comments on the job market: “Owner complaints about “finding qualified workers” are rising, job openings are near 42 year record high levels, and job creation plans remain solid. Over 80 per cent of those hiring or trying to hire in May reported few nor no qualified applicants. This is inconsistent with current Fed policy, which has no impact on the supply of qualified workers.”
- Crude oil prices rallied. US benchmark West Texas Intermediate crude rose more than 3% to as high as $US60.38 per barrel. Brent crude, the international benchmark, climbed more than 3.5% to around $US65 per barrel. In its monthly short-term outlook released Tuesday, the Energy Information Administration forecast lower US oil production in the coming months. In May, US oil output averaged about 9.6 million barrels per day, but that’s expected to “generally decline” from this month until early 2016.
- Burlington Stores shares fell more than 10% after the company reported a first-quarter sales miss. The off-price retailer reported sales of $US1.19 billion, less than the forecast for $US1.22 billion. Adjusted earnings per share of $US0.41 met expectations. Sales at stores open for at least a year rose 0.8% in the quarter, down from a 2.7% rise in Q1 2014. Burlington also announced that full- and part-time associates who’ve been with the company for at least six months will be paid a minimum of $US9 an hour from July 5. The stock is up 74% over the past 12 months.
- Lululemon raised its expectations for revenues this year after reporting a strong first quarter, and shares jumped 9%. The athletic apparel company beat expectations on the top and bottom lines. Adjusted earnings per share came in at $US0.34, just above the consensus forecast for $US0.33, and sales came in at $US423.5 million, beating estimates for $US418.8 million. The company raised its outlook for full-year net revenues to the range of between $US2 billion and $US2.05 billion, with the expectation for comparable store sales “in the mid single digits on a constant dollar basis.”
- Wall Street came away less than surprised after Apple’s big event yesterday. At the Worldwide Developers Conference in San Francisco on Monday, Apple unveiled Mac OS X Capitan, iOS 9 for iPhones and iPads, software updates for Apple Watch, and a subscription service called Apple Music. Deutsche Bank analysts wrote, “Most of the announcements were in line with expectations heading into the event, and the operating system enhancements were generally evolutionary as opposed to revolutionary in our view.” This sentiment was echoed in several research notes published on Tuesday morning. Shares fell to the lowest level in nearly a month.
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