Dow: 13,575 (+0.60%) S&P 500: 1,461 (+0.72%)
We watched the debate last night live from MarketSnacks headquarters (burning the midnight oil for our real-time Japanese MarketSnacks for the Tokyo markets, by popular demand)…and we’d like to send our condolences to our friend & PBS moderator Jim Lehrer, who was jostled around like a directionless pinball zipping through an arcade game. Ahead of tomorrow’s big monthly government employment report, coal companies rose broadly today after Mitt Romney said he “liked” coal energy. Speaking of likes, Facebook snatched its 1 billionth user today, but the big movers were some US econ reports that set the stage for tomorrow’s major employment report for September. While the presidential debate headlines dominated the news and chatter on Wall Street, the Dow gained 60 points on the eve of the important jobs report.
Weekly jobless claims steady at 367,000, factory orders fall by 5% in August
Applications for initial unemployment benefits increased by 4,000 to 367,000 last week, according to the Weekly Jobless Claims report. Although the number of workers laid-off last week did increased slightly, it’s just above the 2-month low, creating some optimism for tomorrow’s jobs and unemployment rate report. And to give you some flavor of how bearish analysts have gotten on US manufacturing, new orders from American factories dropped 5.2% in August from July, the biggest decline in 3 years…which actually beat analyst expectations – Investors were delighted to see the 5% fall when they were expecting 6. The driver of the decline was a cut back in orders of aircraft.
Facebook reaches 1 Billion users, Zynga falls on earnings outlook
Econ data may have moved financial stocks the most today, but cool tech companies took the spotlight. Facebook (FB), now consistently trading at less than half its $38 IPO price, reached 1 billion users today, but the stock barely budged on the big news (we assume this is the unofficial threshold at which people who live in Brooklyn consider the site “not cool”). Investors want the bottom line – how can Zuckerberg make the mobile FB site profitable with advertising? The social network-based gaming company Zynga (ZNGA) dropped almost 20% today after cutting its full-year earnings estimates based on a poor 3rd quarter. Shockingly, people with nothing to do but compete over digital livestock and fictional farms online all day do, in fact, get bored with the routine. The struggling firm (whose product is tied to Facebook’s platform) also faces a huge loss on OMGPOP (worst name for a business ever. Ever), maker of the “Draw Something” app, whose revenues plummeted after Zynga acquired it.
- The political and financial stakes are high tomorrow at 8:30 AM for the government’s non-farm payroll report. Analysts expect that 113,000 jobs were created last month and unemployment increased to 8.2%. Market makers are ready to pull the trigger to buy or sell off the headline news…
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