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US midday: Jobs data sends crude futures careening lower

Date: Friday 01 Jun 2012

US midday: Jobs data sends crude futures careening lower

-Obama: Euro-crisis starting to cast shadow on US
-JP Morgan cuts US Q3 GDP forecast to 2% from 3%

Dow Jones: -1.99%
Nasdaq Comp.: -2.57%
S&P 500: -2.21%

The release of a far weaker than expected non-farm payrolls reports Stateside has sent treasury yields surging higher, at the same time that it has knocked the US dollar off its perch although perhaps not for too long. Similarly, West Texas crude futures have been sent careening downwards while gold mining stocks have been hurtled higher on a rebound in expectations for further monetary easing.

The Dow Jones however has wiped out its gains for the year on the back of those jobs numbers. As well, President Obama's chances of re-election this next fall may have suffered a setback, for no US President has ever been re-elected with the unemployment rate standing above 8%.

US non-farm payrolls rose by only 69,000 in May, well below the 150,000 expected by the consensus. At the same time the length of the average work-week decreased slightly and hourly earnings came in under expectations.

As can now be heard on the either side of the Atlantic (or the Pacific for that matter), there are now calls for further stimulus in the United States as well. One such voice is that of the President of the Federal Reserve Bank of Boston, who now espouses that the central bank ought to increase the duration of its so-called operation ‘twist’.

For their part, economists at Barclays are saying that it was, "clearly a soft report that suggests a loss of momentum in the labour market recovery across jobs, hours worked and the unemployment rate. The likelihood of further monetary policy easing (in the US) has risen appreciably, in our view." Similarly, but in another report, these analysts indicate that they now expect the European Central bank to announce new LTRO measures at its next policy meeting (this coming week).

Meanwhile, and in company news, Chrysler has unveiled a smaller than forecast increase in like-for-like sales in the US during the month of May, of 30% (Forecast: 40%).

Verizon is to acquire Hughes Telematics for $612m.

General Motors expects to reduce its pension obligations by $26bn by offering lump-sum payments to about 42,000 retirees.

From a sector stand-point the worst performers now are: home construction (-8.14%), gambling (-6.75%) and hotels (-5.64%). The best, by far, is now gold mining (8.1%).

ISM surprises on the upside



The unemployment rate rose to 8.2% in May, from 8.1%, a tenth of a percentage point more than what was expected.

The ISM manufacturing sector purchasing managers’ index for the month of May fell to 53.5 (Consensus: 53.8) from 54.8. Nonetheless, the new orders sub-index rose to 60.1 from 58.2.

Construction spending grew by 0.3% month-on-month in April (Consensus: 0.4%). The previous month’s reading has been revised higher, top 0.3% from a preliminary estimate of 0.1%.

10 year Treasuries shoot higher



Front month West Texas crude futures are off by 4.72% to the $82.47/barrel mark in NYMEX Trading.

10 year US Treasuries are now rising by no less than 32/32 dollars, with yields at an amazingly low 1.45%.

S&P 500 - Risers
Newmont Mining Corp. (NEM) $50.59 +7.27%
MEMC Electronic Materials (WFR) $1.72 +2.99%
Duke Energy Corp. (DUK) $22.30 +1.46%
Tesoro Corp. (TSO) $22.38 +1.18%
Northeast Utilities (NU) $36.37 +0.99%
Progress Energy Inc. (PGN) $55.25 +0.78%
Clorox Co. (CLX) $69.33 +0.77%
Pepco Holdings Inc. (POM) $19.20 +0.73%
CONSOL Energy Inc. (CNX) $28.24 +0.57%
Washington Post Co. (WPO) $350.28 +0.42%

S&P 500 - Fallers
PulteGroup Inc. (PHM) $8.24 -11.97%
Lennar Corp. Class A (LEN) $24.60 -9.86%
D. R. Horton Inc. (DHI) $15.00 -9.64%
Yum! Brands Inc. (YUM) $64.71 -8.03%
Starwood Hotels & Resorts Worldwide Inc. (HOT) $48.80 -7.66%
Huntington Bancshares Inc. (HBAN) $6.05 -7.49%
Eastman Chemical Co. (EMN) $43.10 -7.43%
Regions Financial Corp. (RF) $5.84 -7.15%
Chesapeake Energy Corp. (CHK) $15.70 -7.10%
Micron Technology Inc. (MU) $5.43 -7.02%

Dow Jones I.A - Risers

Dow Jones I.A - Fallers
Hewlett-Packard Co. (HPQ) $21.44 -5.47%
Bank of America Corp. (BAC) $6.99 -4.90%
American Express Co. (AXP) $53.23 -4.66%
JP Morgan Chase & Co. (JPM) $31.84 -3.96%
Boeing Co. (BA) $67.25 -3.39%
McDonald's Corp. (MCD) $86.56 -3.11%
General Electric Co. (GE) $18.54 -2.88%
Intel Corp. (INTC) $25.13 -2.77%
United Technologies Corp. (UTX) $72.06 -2.77%
Home Depot Inc. (HD) $48.00 -2.72%

Nasdaq 100 - Risers
Vodafone Group Plc ADS (VOD) $26.83 +0.15%

Nasdaq 100 - Fallers
Seagate Technology Plc (STX) $21.86 -6.70%
Wynn Resorts Ltd. (WYNN) $96.55 -6.30%
First Solar Inc. (FSLR) $11.83 -5.81%
Sandisk Corp. (SNDK) $31.01 -5.17%
Starbucks Corp. (SBUX) $52.12 -5.05%
Urban Outfitters Inc. (URBN) $26.62 -4.83%
J.B. Hunt Transport Services Inc. (JBHT) $54.38 -4.81%
Intuitive Surgical Inc. (ISRG) $500.05 -4.41%
Marvell Technology Group Ltd. (MRVL) $11.99 -4.31%
QUALCOMM Inc. (QCOM) $54.88 -4.24%

AB

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