It was an up-and-down day for stocks, ending in the down phase.
The main benchmarks had trimmed losses by the close with the S&P 500 down seven points (0.3%) at 2,154; the Dow Jones industrial average off 28 points (0.2%); and the Nasdaq Composite down 14 points (0.3%) at 5,292.
Mid-caps had it tougher, with the S&P 400 index suffering a 10 point (0.7%) fall to 1,534, and small caps tougher still, with the Russell 2,000 index 10 points (0.8%) easier at 1,237.
Among the blue-chips, fashion firm Gap Inc (NYSE:GPS) and Tyson Foods Inc (NYSE:TSN) caught they eye, for different reasons.
Read Brokers: Time to step back in that Gap
The Gap rose 15% on the back of better-than-expected results but a broker note knocked food products provider Tyson Foods back 9%.
The stock was downgraded to ‘sell’ from ‘buy’ by the Pivotal Research Group on concerns over what the broker calls “a powerfully convincing class-action complaint” that alleges Tyson, together with Koch Foods and multiple other players in the broiler chicken business, systematically colluded to reduce production of broilers since about 2008.
Mid-session
It took a while but the market made it up its mind that this morning’s jobs data was bad for stocks.
The Dow Jones was off 95 points at 18,173 and the S&P 500 was down 14 points at 2,147, both after opening firm in the immediate aftermath of the release of the jobs figure.
The mid-cap index was down just over one per cent, or 16 points, to 1,528. Likewise, the small-cap Russell 2,000 index was down 1.1%, or 14 points, at 1,232.
Fashion chain Gap Inc (NYSE:GPS), up 14%, was doing its best to raise spirits, as it said it saw an improvement in margins in September.
The retailer’s Old Navy chain had a particular strong month, despite the whole group’s operations being disrupted by a fire at a distribution center in New York.
Investors were also hurrying to buy shares in oil and gas company Harvest Natural Resources Inc (NYSE:HNR), which is mulling whether to sell off its remaining assets and wind up the company.
The company has completed the sale of its Venezuelan assets, leaving it focused on its properties in Gabon, and it revealed today that a couple of potential buyers are sniffing around those assets as well.
Restaurant chain Ruby Tuesday Inc (NYSE:RT) was off the menu as it reported a slide in like-for-like sales in the third quarter of 2016.
Interim president & chief executive officer Lane Cardwell reported “while the casual dining environment remains highly competitive and challenging as evidenced by our negative quarterly same-restaurant sales, our trend improved sequentially during the [fiscal] first quarter as we made investments in highlighting value aimed at building guest counts. In fact, we generated positive traffic in August through a successful 3 Course Meal offer for $12.99,’ Cardwell revealed, all to no avail, as the shares slipped 1.1% to US$1,232.69.
Open
Stocks opened little changed after a mildly disappointing set of jobs numbers for September.
September saw 156,000 new jobs added, which was not only below the 175,000 consensus forecast but lower than August’s reading, which was revised to show a gain of 167,000 jobs.
“The headline figure sits firmly in Goldilocks territory, and the rise in the participation rate nicely offsets the surprise increase in the unemployment rate,” suggested David Lamb, head of Dealing at FEXCO Corporate Payments.
“Interest rate hawks are set to be the only ones disappointed by such a steady figure, as the Fed’s planned hike is now unlikely to come before December,” Lamb predicted.
Chris Williamson, chief business economist at IHS Markit, noted noted the rate of job creation has now slowed for three successive months, “though June’s peak of 271,000 was a very solid rise”.
“Even with the slowing, this is still a robust rate of job creation, and more than enough to offset population growth.
“Many will therefore brush this off as a natural slowing in the rate of employment growth because the economy is close to full employment. What’s more, the increase in unemployment can also be explained away by the positive development of a rise in the number of people joining the labour market.
“Such an optimistic view may be too complacent: we note that the labour market slowdown has come at a time when business confidence has been rattled by unusually high uncertainty as the presidential election looms, which is holding back investment decisions and hiring, albeit hopefully temporarily,” Williamson added.
For those keeping score, some 15mln new jobs have been created since the low point (February 2010) of the jobs market under the Obama administration. Since his first day in office, 10.8mln new jobs have been created.
The S&P 500 initially opened higher but quickly slipped back to 2,158, down a couple of points on the day.
The S&P 400, which tracks the performance of mid-caps, followed a similar trajectory, and was down a couple of points at 1,542 in the first 15 minutes of trading.
Down among the small caps, the situation was also muddled, with the Russell 2,000 index off just over a point at 1,247.
Comtech Telecommunications Corp (NASDAQ:CMTL) caught the eye in early dealings after it published its full-year results.
Net sales for the three months ended July 31, 2016 were US$152.4 million compared to US$77.5 million for the three months ended July 31, 2015.
The period-over-period increase in net sales reflected incremental sales of some US$85.4 million as a result of the acquisition of TeleCommunication Systems, Inc, partially offset by lower sales of legacy Comtech products.
Cousins Properties Incorporated (NYSE:CUZ) slumped by more than a quarter as it completed the spin-off of real estate investment trust, Parkway, Inc (NYSE:PKY).
Shares in Clovis Oncology Inc (NASDAQ:CLVS) took a hammering after the company announced the oral presentation of the primary efficacy and safety data from its NDA dataset for rucaparib, a third-line treatment of ovarian cancer patients with BRCA-mutated tumors.
Of the 377 ovarian cancer patients treated with a starting dose of rucaparib 600 milligrams, nine patients had adverse events that led to death, one of which was deemed to be unrelated to the treatment received.
Shares lost over a quarter of their value.
Preview – update
September’s jobs data came in pretty below expectations, with 156,000 new jobs added, compared to expectations of a 175,00 increase.
Nevertheless, traders bid up the price of the main benchmarks on spread-betting sites, with the S&P now topped to open at around 2,162, up a point, while the Dow Jones is expected to open its account at around 18,300, presumably in the expectation that this will mean the Fed is inclined to hold off on rate rises for a bit longer.
It was a “reasonable, but not great payrolls” report, according to Rob Carnell, chief international economist at Dutch finance house ING.
“The US labour report came in a little lower than expectations, but we would stress that the 156K non-farm payrolls jobs created in September will probably be enough to satisfy all but the most dovish members of the FOMC that the labour market continues to make progress,” Carnell noted.
“The unemployment rate ticked up from 4.9% to 5.0%, but most of that appeared to be a rounding error. The labour force surged 444,000, of whom, most (354,000) found employment, so this is really only a very modest disappointment,” he added.
On the corporate front, ADRs of Silicon Motion Technology Corp (NASDAQ:SIMO), the Taiwan-based memory chip company, raced higher in pre-market trading as it raised its revenue guidance.
The ADRs were up 6% at US$54.45 in screen-based trading, as the company prepared the market to expect third quarter revenue to be up 11 – 13% on the preceding quarter.
JP Morgan has been busy with the red pen, downgrading a few stocks. Merrimack Pharmaceuticals Inc (NASDAQ:MACK) slipped 3.7% to just below US$6 ahead of the opening after the broker downgraded the stock to ‘neutral’ from ‘overweight’ and cut the price target to US$7 from US$8.
Supermarket giant Wal-Mart Stores Inc (NYSE:WMT) was down a tad at US$69.36 as JP Morgan (JPM) cut the price target to US$72 from US$75.
Range Resources Corp (NYSE:RRC) received some love from JPM, however, as it abandoned its neutral stance and moved to an ‘overweight’ position,.
Glamor stock Tesla Motors Inc (NASDAQ:TSLA) shrugged off a downgrade and price target cut from Goldman Sachs to edge 85 cents higher ahead of the bell to US$201.
Goldman Sachs’s David Tamberrino is concerned about the electric car maker’s proposed acquisition of SolarCity, and has hacked the price target to US$185 from US$240.
Preview
Investors look set to keep their powder dry ahead of the release of September’s jobs data today.
The S&P 500 is seen opening a point or so lower from last night’s close of 2,161. The Dow Jones average is expected to kick off at around 18,262, having closed last night at 18,268, although that could all change when the jobs data comes out.
Economists expect that around 175,000 jobs will have been added in September, an improvement on August’s addition of 155,000 jobs.