Midday Update: Stocks Stage Impressive Rebound on Upbeat Job Market Data; Twitter Slumps on Declining Users
Market-friendly data on the U.S. job market and upbeat earnings from Dow component Walt Disney Cos. ( DIS ) has been fueling an impressive rally in the stock market today with the Dow Industrials Average posting a triple-digit gain and trading back above its 200-day moving average.
Although the Nasdaq Composite index is weighed down by a free fall for shares of Twitter ( TWTR ) despite the micro-blogger posting Q4 earnings and revenue that topped analyst expectations, much of that pressure is mitigated by strong gains by Green Mountain Coffee ( GMCR ) after it announced a 10-year partnership with Coca-Cola ( KO ) to develop home soft-drink dispensers, leaving the tech-laden market index with a modest gain. Homebuilders, meanwhile, were supporting gains for the S&P 500 as falling Treasury yields are expected to translate into more attractive mortgage rates.
Ahead of the Labor Department tomorrow issuing January payrolls, investors were encouraged by a greater-than-expected decline in new unemployment claims, with first-time applications for unemployment insurance falling by 20,000 claims to 331,000 during the week ended Feb. 1. The median forecast of economists surveyed by Bloomberg called for a decrease to 335,000.
Other positive news included a 3.2% rise in Q4 non-farm productivity over an upwardly revised 3.6% increase in Q3. Unit labor costs fell by more than double the 0.7% decline the Street had been expecting and followed a downward revision for Q3 levels.
Also today, the U.S. trade deficit widened in December to $38.7 billion from an upwardly revised deficit of $34.6 billion in November, the Commerce Department reported. That was slightly wider than the $36.0 billion deficit in the market consensus.
Europe's equity markets were all higher as well, following the lead of their counterparts on the other side of the Atlantic. The European Central Bank and Bank of England both opted to keep their key lending rates unchanged at 0.25% and 0.50%, respectively. ECB President Mario Draghi also gave European stocks a boost after dismissing any signs of deflationary pressure, thus reducing odds for further rate cuts and boosting demand for equities.
Crude oil was up $0.88 to $98.27 per barrel. Natural gas was up $0.04 to $5.08 per 1 million BTU. Gold was down $0.40 to $1,256.50 an ounce, while silver was up $0.09 to $19.91 an ounce. Copper was up $0.04 to $3.23 per pound.
Among energy ETFs, the United States Oil Fund was up 1.04% to $35.05 with the United States Natural Gas Fund was down 1.38% to $24.96. Amongst precious-metal funds, the Market Vectors Gold Miners ETF was down 0.60% to 23.14 while SPDR Gold Shares was down 0.12% to $121.14. The iShares Silver Trust was up 0.63% to $19.19.
Here's where the markets stand at mid-day:
NYSE Composite Index up 108.28 (+1.10%) to 9,917.31
Dow Jones Industrial Average up 153.01 (+0.99%) to 15,593.24
S&P 500 up 18.23 (+1.04%) to 1,769.87
Nasdaq Composite Index up 42.74 (+1.08%) to 4,054.30
Nikkei 225 Index down 0.18%
Hang Seng Index up 0.72%
Shanghai China Composite Index down 0.82%
FTSE 100 Index up 1.55%
CAC 40 up 1.71%
DAX up 1.54%
NYSE SECTOR INDICES
NYSE Energy Sector Index up 1.36%
NYSE Financial Sector Index up 1.02%
NYSE Healthcare Sector Index up 0.35%
(+) GMCR (+30.0%) Coca-Cola ( KO ) buys 10% equity stake in the coffee company after signing 10-year agreement to collaborate on a home beverage-dispensing system.
(+) AKAM (+18.7%) Earns $0.55 per share in Q4, beating the analyst consensus on Capital IQ by $0.03.
(+) USG (+13.0) Posts a quarterly profit for the first time since 2007, also topping Wall Street expectations for Q4 earnings by $0.09 per share.
(-) TWTR (-20.6%) Shares slump despite better-than-expected Q4 earnings and revenue after decelerating user growth and engagement metrics disappointed investors.
(-) OCN (-7.2%) New York state regulators reportedly table the company's $2.7 bln deal to buy mortgage-servicing rights from Wells Fargo ( WFC ), citing concerns over its ability to handle more loan business, according to the Wall Street Journal.
(-) P (-13.2%) Q4 revenue narrowly misses Street view; guides Q1, FY14 per-share earnings below analyst estimates.