Stock Market Wrapup Sept. 7th
Stocks were slammed on the final trading day of the week as poor employment data sent bulls looking for the exits. At the close, The Dow, Nasdaq, and S&P 500 all dropped over -1.5%. Gold, meanwhile, continued to advance in price, with the commodity ending the session up $5.10 to finish at $709.70.
Investors woke up to a job shock, as the Labor Department reported that the economy unexpectedly lost jobs for the first time in nearly four years last month. In all, employers cut -4,000 workers, compared with a revised gain of 68,000 in July. The unemployment rate held steady at 4.6%. Economists got it all wrong as they expected the economy to produce 100,000 jobs in the month. Breaking down jobs in sectors, factory payrolls slid by -46,000, while builders' payrolls fell by -22,000. Even the government sector reported payrolls down -28,000.
In housing sector news, Hovnanian (NYSE: HOV - News) reported a quarterly loss due to land impairment charges related to unprofitable inventory. For its third quarter, the builder reported a loss of -$80.5 million, or -$1.27 a share, compared with a year ago profit of $74.4 million, or $1.15 a share. Sales plunged by -27% to $1.1 billion, as the housing market has continued to worsen. New contracts also fell by -24%. Shares fell 7.1%. Elsewhere in the housing spotlight, Beazer Homes (NYSE: BZH - News) shares sank 13% after the company received a notice of default tied to its senior notes. The company responded by saying the letter was "invalid and without merit."
In other corporate news, motorcycle maker Harley Davidson (NYSE: HOG - News) saw investors flee the name after it announced that it is cutting production in the third quarter following last month's poor sales for its "hogs." The company expects to ship 86,000-88,000 in the third quarter, down from 91,000-95,000 previously forecast. Due to the lower sales, it now sees full-year earnings coming in at $3.69-3.77, analysts were expecting full-year earnings of $4.12. The stock dropped 9.2%.
Office supply retailer Office Depot (NYSE: ODP - News) warned investors that its third and fourth quarters would likely fall below year-ago levels as small business customers have cut back on spending. Citing continued softness in the housing market, management noted that EPS would likely fall by double digits in the third quarter. Investors were unsympathetic, sending the shares reeling 9.8%.
Chip company National Semiconductor (NYSE: NSM - News) reported that net income in its latest quarter plunged -29% to $58.6 million, or 30 cents a share, compared to a year ago profit of $12.01 million, or 35 cents. Sales totaled $471.5 million. While its net dropped, it still managed to beat analysts' estimates by a nickel. The company said that looking ahead it sees sales increasing 4-7% sequentially.
In deal news, shareholders of TXU (NYSE: TXU - News) agreed to sell the company for $32 billion to private equity players led by Kohlberg, Kravis & Roberts and TPG. 95% of the votes were in favor of the deal. The company noted that in order for the deal to close, it must gain the approval of regulators. TXU is the largest ever buyout.
By The BullMarket.com Staff
Investors woke up to a job shock, as the Labor Department reported that the economy unexpectedly lost jobs for the first time in nearly four years last month. In all, employers cut -4,000 workers, compared with a revised gain of 68,000 in July. The unemployment rate held steady at 4.6%. Economists got it all wrong as they expected the economy to produce 100,000 jobs in the month. Breaking down jobs in sectors, factory payrolls slid by -46,000, while builders' payrolls fell by -22,000. Even the government sector reported payrolls down -28,000.
In housing sector news, Hovnanian (NYSE: HOV - News) reported a quarterly loss due to land impairment charges related to unprofitable inventory. For its third quarter, the builder reported a loss of -$80.5 million, or -$1.27 a share, compared with a year ago profit of $74.4 million, or $1.15 a share. Sales plunged by -27% to $1.1 billion, as the housing market has continued to worsen. New contracts also fell by -24%. Shares fell 7.1%. Elsewhere in the housing spotlight, Beazer Homes (NYSE: BZH - News) shares sank 13% after the company received a notice of default tied to its senior notes. The company responded by saying the letter was "invalid and without merit."
In other corporate news, motorcycle maker Harley Davidson (NYSE: HOG - News) saw investors flee the name after it announced that it is cutting production in the third quarter following last month's poor sales for its "hogs." The company expects to ship 86,000-88,000 in the third quarter, down from 91,000-95,000 previously forecast. Due to the lower sales, it now sees full-year earnings coming in at $3.69-3.77, analysts were expecting full-year earnings of $4.12. The stock dropped 9.2%.
Office supply retailer Office Depot (NYSE: ODP - News) warned investors that its third and fourth quarters would likely fall below year-ago levels as small business customers have cut back on spending. Citing continued softness in the housing market, management noted that EPS would likely fall by double digits in the third quarter. Investors were unsympathetic, sending the shares reeling 9.8%.
Chip company National Semiconductor (NYSE: NSM - News) reported that net income in its latest quarter plunged -29% to $58.6 million, or 30 cents a share, compared to a year ago profit of $12.01 million, or 35 cents. Sales totaled $471.5 million. While its net dropped, it still managed to beat analysts' estimates by a nickel. The company said that looking ahead it sees sales increasing 4-7% sequentially.
In deal news, shareholders of TXU (NYSE: TXU - News) agreed to sell the company for $32 billion to private equity players led by Kohlberg, Kravis & Roberts and TPG. 95% of the votes were in favor of the deal. The company noted that in order for the deal to close, it must gain the approval of regulators. TXU is the largest ever buyout.
By The BullMarket.com Staff
posted by Stock Administrator @ 9:29 PM
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