Halftime Report 6.1.2012

The market is also falling today due to a lower than expected payroll and unemployment report values. Nonfarm payrolls rose 69,000 in May, according to the Labor Department, the smallest gain in a year and well below forecasts for an increase of 155,000. Moreover, the unemployment rate ticked one-tenth of a percentage point higher to 8.2%, the first increase in nearly a year. However, it was reported that the increase in unemployment was not a result of layoffs, but induviduals coming back into the work force and try to find jobs. With the U.S. economy looking weaker than it did just several weeks ago, pressure is mounting on the Federal Reserve to step in again with additional measures to stimulate growth. Futhermore, Congress is divided and idle in an election year in which the economy will be the biggest issue in the local and Presidential elections.

All 10 of the S&P 500’s sectors fell early morning, as did all components of the Dow. Financial stocks, including Bank of America (BAC), -4.41% were the biggest decliners. American Express (AXP), -4.49% also fell, while tech company Hewlett-Packard (HPQ), -3.88% dropped. The jobs report sparked a rush out of stocks into haven assets. Gold prices shot up 3.1%, to $1,613 a troy ounce. The yield on 10-year Treasury notes fell to 1.472%, dropping below 1.5% for the first time ever. Groupon (GRPN), dropped -10.07 as more shares were introduced to the public following their IPO. Omnivision (OVTI) lost -94.2% as they missed quarterly earnings, despite growth. Most commodities fell. Crude-oil prices slumped 3.1%, to $83.40 a barrel. The dollar retreated against the euro and yen.

Thomas Doherty is a student at Villanova University majoring in Finance and Economics. All questions and comments can be sent to Thomas@KeeneOnTheMarket.com