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After The Close - The U.S. stock market sold off this morning, and for the most part, held these sharp losses. After some mixed data earlier this week, traders were not too happy with the employment report released this morning.  According to the Department of Labor, non-farm payrolls increased by 115,000 in April, where a much higher figure of 168,000 had been expected. Further, the widely-watched private payroll figure also came in weaker than anticipated, further casting doubt on the economic recovery’s staying power. Perhaps, the only positive aspect to this morning’s issuance was the slight dip in the unemployment rate from 8.2% to 8.1%. Nonetheless, this alone was not enough to keep the market rising. Next week, the economic releases will be light on Monday and Tuesday, and all things considered, that may be for the best.

Notably, the idea that the economy may be struggling also reverberated through the commodity markets. Crude oil plunged about 4% to $98.44 a barrel. Notably, some traders look to crude as a broader economic indicator. Elsewhere, in commodities, gold rallied slightly, further suggesting that flight-to-safety behavior is resurfacing.  Skittish investors were also scooping up U.S. Treasuries, sending the yield on the 10-year note down to 1.88%. A further measure of faltering investor sentiment could be seen in the VIX, which spiked over 7% today.

Meanwhile, traders largely overlooked the earnings news today. Nonetheless, shares of LinkedIn (LNKD) rose sharply, after the Internet company reported strong results and provided a decent outlook. Elsewhere, Estee Lauder (EL) met expectations, but the stock sold off nonetheless. In the financial sector, American International Group (AIG) saw its shares drop, even though the company delivered better-than-anticipated profits.

At the end of the day in New York, the Dow Jones Industrial Average had lost 168 points (-1.3%); the S&P 500 Index was down 22 points (-1.6%); and the NASDAQ, which was the weakest of the group, shed 68 points (-2.3%). Market breadth was decidedly negative, as declining stocks outnumbered advancers by about 3 to 1 on the NYSE. The market’s sectors were all weak. The technology, energy, capital goods, and basic materials issues were off sharply.  In contrast, there was some relative strength in the utilities, which offer large yields and tend to be more defensive.

Technically, the market sold off sharply today, extending a slide that started a few days ago. Today’s move pushes the S&P 500 back below its 50-day moving average, located at 1,387. Hopefully, the Index will find some support at the 1,360 area, which marks the bottom part of the correction that started in early April. – Adam Rosner

At the time of this article’s writing, the author did not have positions in any of the companies mentioned.

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12:00 PM ET -  The U.S. equity market started the day in the red and the losses increased as the morning progressed. Thus, as we hit the midday hour on the East Coast, the Dow Jones Industrial Average, the tech-heavy NASDAQ, the broader S&P 500 Index, and the small-cap Russell 2000 are all down more than 1%. 

The selling, which is reflected in the wide spread between decliners and advancers on both the Big Board and the NASDAQ, has been rather encompassing, with all of the major sectors, including the defensive-oriented utilities group, in negative territory. The biggest laggard thus far have been energy stocks, which are under pressure as weak economic news is pushing oil prices markedly lower today. The other notable declines are in the technology, capital goods, basic materials, and consumer cyclical sectors—areas also prone to fall on disappointing economic reports.

The U.S. economic news, much like yesterday, was the primary culprit behind the latest setback on Wall Street. Indeed, an hour before the commencement of trading on these shores, the investment community received another disconcerting economic metric when the Department of Labor issued its monthly employment and unemployment report for April. Data showed that job growth had sputtered for a second month in a row, with non-farm payrolls climbing by an understated 115,000. That was well below the 168,000 jobs that had been expected. The last two monthly figures, including a revised gain of 154,000 in March, are also well below the typical 200,000 increase needed to make a serious dent in the nation’s unemployment level. Speaking of the jobless rate, that metric came in at 8.1%—expectations had been that this rate would have stayed unchanged at 8.2%. Still the latter reading is more of a lagging indicator, so investors elected to focus on the job creation number, and accordingly a selloff followed.

Meanwhile, the earnings releases have not provided much support to the market, as today’s group of reports could be termed mixed, at best. Dow-30 component Kraft Foods (KFT - Free Kraft Foods Stock Report) beat March-period sales and operating earnings expectations and social network operator LinkedIn (LNKD) released better-than-expected financials and an upbeat outlook after yesterday’s market close. However, coffeehouse operator Caribou Coffee (CBOU), much like industry peer Green Mountain (GMCR) did yesterday, reported disappointing figures, while retailers Body Central (BODY) and Estee Lauder (EL) failed to impress investors. American International Group (AIG) shares fell after the insurance giant reported that sales at its main units declined last quarter.

It was also been a busy day in the commodities market, with the most noteworthy event being the aforementioned sharp drop in oil. Crude prices, meantime, are trading below the $100-a-barrel mark on the New York Mercantile Exchange (for the first time since February), owing to the growing concerns about the global economy. Oil futures are not lacking any companionship today, as a majority of the agricultural, livestock, and soft commodities are also in the red.

Elsewhere, it has not been any better overseas, with all of the major European bourses carrying sizable losses as trading enters its final minutes on the Continent. European bourses are weaker on the U.S. economic reports, as well as on concerns about the outcomes of some important presidential elections on the Continent. Specifically, incumbent French President Nicolas Sarkozy is likely headed for a defeat in Sunday’s presidential elections, while voter dissatisfaction with severe austerity measures in Greece is expected to hurt the main parties, New Democracy and Pasok, which have endorsed the country’s bailout and its strict austerity conditions. The outcomes of these elections could severely limit the euro zone’s ability to tackle the lingering sovereign-debt problems in the region. 

All of the aforementioned events have investors skittish today, with many once again exhibiting a “flight-to-safety” strategy. Both bonds and gold, especially the former, are in demand today. The yield on the 10-year Treasury note, which moves in the opposite direction to the price, continues to fall in response. Stay tuned.   - William G. Ferguson

At the time of this report's writing, the author did not have positions in any of the companies mentioned.

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11:05 AMET - Stocks are off sharply this morning. The Dow Industrials are off 126 points (-1.0%); the S&P 500 is down 16 points (-1.2%); and the NASDAQ, which is leading the market lower, is shedding 48 points (-1.6%).  The decline likely reflects concerns about the nation’s economy. Specifically, this morning’s non-farm payroll report was somewhat disappointing.  Only 115,000 non-farm jobs were added to the economy in April, falling well short of expectations. Further, jobs added in the private sector also came in lower than anticipated. The one positive aspect of the report was the drop in the jobless rate from 8.2% to 8.1%, but even here, part of that reduction reflected people leaving the job market. Overall, though, the report was sufficiently disappointing when coupled with yesterday’s listless non-manufacturing report, which has put some further pressure on an already skittish market. Stay tuned. - Adam Rosner

At the time of this report's writing, the author did not have positions in any of the companies mentioned.

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Stocks to Watch from The Survey Corporate earnings continue to dominate the headlines. After the market closed yesterday, Kraft (KFTFree Kraft Stock Report), the world’s second-largest branded food and beverage company, released March-period sales and operating earnings that were ahead of our estimates. However, the stock is trading slightly lower in the premarket. Online social network LinkedIn (LNKD) released better-than-expected financials and an upbeat outlook last night, causing its share to jump in the premarket. On the other hand, coffeehouse operator Caribou Coffee (CBOU) announced disappointing numbers. The stock had fallen sharply during regular trading yesterday, likely the result of industry peer Green Mountain Coffee’s (GMCR) weaker-than-anticipated results, and is down even further in premarket trading today. In an even more severe selloff, shares of apparel retailer Body Central (BODY) plunged in after hours trading, a result of that company’s disappointing outlook. Investors are also digesting earnings releases from insurer American International Group (AIG) and cosmetics company Estee Lauder (EL), neither of which appeared to impress investors, as both stocks are lower in early morning trading.

In other news, Dolby Laboratories (DLB), a developer of audio technologies for movies, electronics, video games, and computers, has announced a strategic alliance with software giant Microsoft (MSFTFree Microsoft Stock Report) to develop sound technologies for personal computers and tablets that use Windows 8. The news caused Dolby stock to soar in premarket trading. – Matthew E. Spencer

At the time of this article’s writing, the author did not have positions in any of the companies mentioned.

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Before The Bell - It is suddenly all about the economy again. Thus, after several weeks in which corporate earnings--specifically results for the first quarter had taken center stage--it is back to focusing on the U.S. business outlook. That is not to say that corporate developments--good and bad--cannot hold sway with traders. For example, it will be a long time before shareholders of coffee roaster Green Mountain (GMCR) will forget yesterday, as that heretofore high-flying stock lost almost 50% of its value in the latest session on dour revenue results and a cautious outlook. Moreover, there is also Europe to consider, where the news regarding that region's economy continues to get worse, with nearly half the nations in the euro zone now officially in recession.

However, these latter matters aside, it is back to being mostly about the economy, and yesterday was a prime example of this. First, there was the surprisingly good report on initial jobless claims. That issuance from the Labor Department had been trending upward in recent weeks, returning to near the 400,000 level, after having pushed down to around 350,000 in March. But, yesterday, the claims number dropped notably, coming in at 365,000 for the week ended April 28th. That was well under consensus. Unfortunately for the bulls, that good news, issued an hour before the start of trading, had just limited effect on the market. What did matter to investors, however, was a report issued by the Institute for Supply Management, an industry trade group, which showed that the nation's non-manufacturing base had improved once again last month, coming in at a reading of 53.5. (A reading above 50.0 signals that this sector is expanding.) But that was two percentage points below the 55.5 result expected, and two-and-a-half points below the prior-month gauge of 56.0.

Investors, who have become somewhat nervous over the past month about the pace of domestic economic growth, as some fear at least a modest linkage with Europe, used this metric as an excuse to take the market lower in the latest session. In all, U.S. stocks, which began the day just nominally to the downside, reacted strongly after the ISM's release at 10:00 AM (EDT) and sold stocks off in a hurry, at one time pushing the Dow Jones Industrial Average to a loss of more than 90 points. Things were a little better by the close, though, as that 30-stock composite ended the day off 62 points. The NASDAQ, though, was hit harder, proportionately, losing 36 points on the day, after having been off, at its nadir, by close to 45 points. Losers, meantime, swamped winners on both the NYSE and the NASDAQ, in a session that was materially weaker than the leading averages would suggest.

Of course, it was more than just the ISM non-manufacturing survey that had investors rattled. There also was this morning's report from the Labor Department on non-farm payrolls and the unemployment rate to consider. Two days ago, Automatic Data Processing issued its own employment survey, which showed the creation of 119,000 private-sector jobs in April--well under the 175,000 total forecast by many economists. Now, going into this morning's Labor Department issuance, expectations had been that 168,000 were added, while the jobless rate was expected to have remained at 8.2%. The actual results, issued just moments ago, showed that the nation added just 115,000 new positions--private sector and government--while the unemployment rate ticked down from 8.2% to 8.1%. Given that this latter metric is more backward looking than the actual job creation number, this latest report has to be considered disappointing.

However, for now, equity traders seem unmoved, as the futures, after a brief sharp selloff after the report's issuance, have regained some their footing and are indicating that the U.S. market will show only modest weakness at the open. At the very least this disappointing report could make for some volatile movement in the upcoming session. Stay tuned. – Harvey S. Katz       

At the time of this report's writing, the author did not have positions in any of the companies mentioned.