Unemployment Data Weighs on Stocks; Gold Retrenches as Commodities Slip

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Stocks are moving deep into the red, with the three major indexes all down more than 1%, after rising unemployment claims signaled more weakness in the recovery. Market attention is also turning to consumer sentiment data and a revision in the U.S. gross domestic product; both are due tomorrow.

New applications for U.S. unemployment compensation rose by 5,000 last week to 417,000, boosted in part by thousands of claims by striking Verizon ( VZ ) workers, the Labor Department reported today. Initial claims from two weeks ago were revised up to 412,000 from an original reading of 408,000. The average of new claims over the past four weeks, which smooths out volatility, increased by 4,000 to 407,500.

Meanwhile, President Obama is reportedly considering a plan to help homeowners by allowing them to refinance their government-backed mortgages at lower rates to cut their costs and put money in their pockets to aid the economy, The New York Times reported. But he is facing opposition.

In company news:

Shares of Apple ( AAPL ) are coming off session lows to trade down 1.99%, or $7.42, to $368.88. The low for the session thus far was $365 after company founder Steve Jobs resigned as chief executive. Jobs issued a statement late Wednesday night saying, "I hereby resign as CEO of Apple. I would like to serve, if the Board sees fit, as chairman of the board, director and Apple employee." Jobs recommended the company execute its succession plan and name Tim Cook CEO. The company followed Jobs' recommendation and named Cook to the top job. Jobs was elected chairman of the board.

Shares of Bank of America ( BAC ) are still up by double digits at mid-day, but easing off from a 19% pre-market surge that came after it said Berkshire Hathaway (BRK.A, BRK.B) will buy 50,000 shares of cumulative perpetual preferred stock with a liquidation value of $100,000 per share in a private offering.

Shares of Pfizer ( PFE ) are down after Merlin Nexus and New Leaf Venture Partners said in a statement today that they have contested the terms of Pfizer's proposed acquisition of Icagen ( ICGN ). Merlin Nexus and NLV Partners said that "the true cost to Pfizer to acquire the company's assets is only $22 million when near-term R&D and milestone payments as well as the cash Icagen currently owns are put into the equation. This cost would be even lower if the Pfizer-Icagen R&D collaboration were renewed after it expires later this year," according to the statement.

Shares of Exxon Mobil (XOM) are down as Reuters reports that workers at the oil major's Papua New Guinea plant site have been on strike since Monday. As many as 100 workers are on strike, the report said, but Exxon is expecting a rapid resolution to the problem to prevent delay on the $15 billion project.

Shares of Wal-Mart Stores (WMT) are down while Reuters reports the retailer is moving on an aggressive price and margin strategy for its acquisition of South Africa's Massmart. Wal-Mart took a 51% stake in Massmart in June, and is pushing to expand the chain in an effort to challenge South Africa's Shoprite, Pick n Pay and Spar. Earlier this week, Bloomberg reported that Shoprite Holdings, the largest retailer in South Africa, is planning to boost the pace of its store expansion this year to counter the world's largest retailer, which entered that market earlier this year with its acquisition of Massmart Holdings.

In earnings news:

--Shares of Big Lots, Inc. (BIG) are down in morning trade after the retailer reported second quarter earnings that topped Street estimates but issued guidance that was mostly below analysts' estimates. Big Lots said Q2 adjusted EPS came in at $0.52, or $0.50 when factoring in new Canadian operations, compared to $0.48 a year earlier and well ahead of the Street view for $0.44.

Commodities are down. December gold contracts are down 1.11% to $1,738 an ounce, while October crude oil contacts are down $0.28 to 84.88 a barrel.

In energy ETFs, the United States Oil Fund (USO) is down 1.03% to $32.74 and the United States Natural Gas fund (UNG) is up 1.48%, to $9.93.

In precious metal ETFs, the SPDR Gold Trust (GLD) is down 1.47% to $169.12. Market Vectors Gold Miners (GDX) is up 0.38% to $60.18. iShares Silver Trust (SLV) is up 0.33% to $38.96.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

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This article appears in: Investing , Commodities

Referenced Stocks: AAPL , BAC , ICGN , PFE , VZ

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