The S&P 500 dropped 9 points, -0.7%, to $1,305 with energy and material stocks leading the decline. The NASDAQ fell 23 points, -0.8%, to $2,814.
Among the day’s economic data, the US economy added 133,000 private sector jobs in May. However, this number was rather disappointing as economists expected the private sector to add 150,000 jobs. Additionally, the number of US workers filing new applications for unemployment benefits increased past industry forecasts. “You take the two together and the labor market is not what you want right now,” said Jim McDonald, chief investment strategist at Northern Trust in Chicago.
This downbeat unemployment report comes on the eve of the government’s closely watched unemployment report Friday morning. The unemployment report has fallen short of expectations for the past two months. Analysts expect non-farm jobs to increase by 150,000 in May with the market moving accordingly with tomorrow’s report. The Commerce Department lowered its estimate for first-quarter U.S. economic growth to 1.9% from 2.2%, in line with economists’ expectation that the U.S. economy slowed more than initial thought during the period. The price index for personal consumption increased 2.4%, as previously estimated.
European markets fell, erasing earlier gains after the downbeat U.S. data. The Stoxx Europe 600 slid -0.7% after slumping -1.5% on Wednesday.
Shares of Facebook (FB) continued to decline Thursday, down another -4.26%, and are now trading below $27 at $26.99. Once again, this marks a major loss from their IPO price of $38 and the $28 price Facebook at which Facebook was initially marketed. Joy Global (JOY), a mining equipment manufacturer, skidded -4.87% as it lowered its full year guidance on a slowing international market in Europe and more importantly, China. Ciena (CIEN) rallied 11.45% after they reported a fiscal Q2 adjusted profit that topped analyst expectations of a slight loss. TiVO Inc. (TIVO) dropped -6.86% as the DVR maker posted larger than expected quarterly losses due to litigation costs and updated a downbeat outlook on weaker sales due to on demand and cable services.
Thomas Doherty is a student at Villanova University majoring in Finance and Economics. All questions and comments can be sent to Thomas@KeeneOnTheMarket.com
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