What’s the Story?

by CC February 3, 2012 9:22 am • Commentary

NYT

The United States economy gained momentum in January, adding 243,000 jobs, the second straight month of better-than-expected gains.

The unemployment rate fell to 8.3 percent, giving a cause for optimism as the economy shapes up as the central issue in the presidential election. The Labor Department’s monthly snapshot of the job market uses a different survey, of households rather than employers, to calculate the unemployment rate.

As measured by both the unemployment rate and the number of jobless — which fell to 12.7 million — it was the strongest signal yet that an economic recovery was spreading to the jobs market. The last time the figures were as good was February 2009, President Obama’s first full month in office.

The report sent stock-index futures up sharply on Wall Street before the opening bell.

The department also revised its estimate for new jobs in December slightly to 203,000. It originally reported that employers created a net gain of 200,000 jobs in December.

The private sector remained the engine of new job gains. While state and local governments continued to lay off workers, private-sector employers added 257,000 payroll jobs in January. The industries with the biggest gains were manufacturing, professional and business services, and leisure and hospitality.

Marketwatch

Treasury prices turned sharply lower on Friday, pushing yields up, after the U.S. government said the economy added many more jobs in January than economists expected, boosting confidence that the economy continues to grow.

Yields on 10-year notes 10_YEAR +4.77%  , which move inversely to prices, turned up 7 basis points to 1.90%, after touching 1.95% just after the report and up from near their lowest level in about six weeks. A basis point is one one-hundredth of a percentage point.

Thirty-year bond yields 30_YEAR +3.79%  jumped 11 basis points to 3.12%.

Yields on 5-year notes 5_YEAR +6.46%  rose 4 basis points to 0.75%, after touching a record low earlier this week.

Two-year yields 2_YEAR +3.48%  were little changed at 0.23%.

Bonds turned down after the Labor Department said the economy added 243,000 jobs in January. Also, the unemployment rate unexpectedly declined to 8.3%

WSJ

Among the companies whose shares are expected to actively trade in Friday’s session are Estee Lauder, Sony and Tyson Foods.

Estee Lauder’s fiscal second-quarter earnings rose 15% as the beauty-products company got a boost from higher-than-expected holiday sales. The company also raised its forecast for the year ahead. Shares were off 6.9% to $54.81 in premarket trading, however, as the company’s target for the current quarter came in short of analysts’ expectations.

Sony said Thursday that its movies and music were profitable in the third quarter, but operating income at both operations fell from a year earlier. The movie studio’s profit margin narrowed to less than 1% despite higher sales, partly because it opened more movies in the latest quarter. The company also introduced its newly appointed chief executive. Shares of the Tokyo-based electronics giant gained 9% to $18.63 premarket.

Tyson Foods’s fiscal first-quarter earnings fell 48% as beef and chicken sales volume dropped, though price increases helped boost revenue. Shares were up 2.6% to $19.10 premarket as results beat analysts’ expectations.

Diagnostic-services provider PerkinElmer swung to a fourth-quarter loss as one-time accounting charges masked a stronger-than-expected core profit. The medical and environmental testing company also projected a bullish full-year profit excluding certain items, with revenue growing within the mid-single digit range. Shares added 4.1% to $25.70 premarket.

Sunoco’s chief executive said she will hand leadership of the company to its finance chief as the refiner swung to a sharp pretax loss in the fourth quarter. The company also unveiled plans to buy back about 20% of its common shares over the next 12 to 18 months and boosted its quarterly dividend by 33%, to 20 cents apiece. Sunoco shares were up 7.2% to at $41 premarket following the shareholder-friendly moves.

Genworth Financial swung to a fourth-quarter profit as the insurer enjoyed net investment gains rather than losses and reported lower policy benefits. Shares were up 6.5% to $8.56 premarket.

Acme Packet’s fourth-quarter profit dropped 40% as core earnings stagnated, falling at the low end of the company’s downbeat guidance amid weak North American demand. Shares fell 12% to $27.31 in recent premarket trading.

Infinera’s fourth-quarter loss widened on weaker margins and higher expenses, but maker of communications gear said revenue in the latest period beat its expectations. Shares jumped 12% to $8.20 in recent premarket trading.

Trimble Navigation’s fourth-quarter earnings slid 20% compared with a year ago, when a tax benefit boosted results, but revenue improved across segments in the latest period. The company’s adjusted earnings and sales beat the guidance given by the provider of global positioning system technology. Shares shot up 10% to $52.77 premarket.

Atmel lowered its fourth-quarter guidance after a major customer moved back a planned payment, sending shares down 6.8% to $9.41 premarket. The chip maker said the rescheduling of payments tied to an unidentified Asian distributor would take about $11 million off its top line.

American Axle & Manufacturing’s fourth-quarter earnings fell 11% as the auto industry supplier saw charges from two plant closures weigh on results, though revenue at non-General Motors Co. (GM) businesses rose into the double digits. Shares were up 3% at $12.70 premarket as earnings beat expectations.

Gilead Sciences fourth-quarter earnings rose 5.7% as the biopharmaceutical company’s product sales continued to rise and it no longer booked deep reductions in royalties. Shares were up 8.1% to $53.30 premarket.

Wynn Resorts’s fourth-quarter profit climbed 67% on a tax benefit and as the casino operator’s Macau operations continued to post revenue growth. Shares fell 3.9% to $116.05 premarket.

Armour Residential REIT and BreitBurn Energy Partners unveiled separate equity offerings Thursday. Armour shares were off 3.2% to $6.97 premarket, while BreitBurn units fell 4.7% to $18.69.

Digital River fourth-quarter earnings fell 19% despite higher revenue because of stiff amortization costs and other items, but adjusted profit rose more than predicted on the back of better-than-expected revenue for the provider of e-commerce outsourcing. Shares advanced 7.5% to $18 premarket.

Shares of Zoltek surged 21% to $11.46 premarket as first-quarter per-share earnings and revenue results beat analysts’ expectations.

THQ’s third-quarter loss widened as weaker sales dragged down its bottom line, prompting the game developer to launch a restructuring plan to reduce its footprint. Shares plunged 24% to 58 cents in recent premarket trading.

Aon’s fourth-quarter profit rose 20% as the insurance brokerage and consulting firm again logged solid results in its human resources business and saw restructuring efforts pay off.

Consulting firm Booz Allen & Hamilton’s fiscal third-quarter earnings surged as the consulting firm’s revenue and backlog continued to grow. The company also approved its first quarterly cash dividend of 9 cents a share. The payments should cost the company about $12.8 million a quarter.

Columbia Sportswear‘s fourth-quarter earnings rose 40% as the maker of active outdoor apparel reported increased revenue across regions, with particular strength in Latin America and Asia, and as margins improved. However, revenue missed the company’s expectations and it issued a downbeat outlook for the new year.

Con-Way’s fourth-quarter earnings soared from a year earlier as gains from a legal settlement boosted bottom-line results and as revenue improved.

Fiserv’s fourth-quarter earnings rose 23% due to higher revenue in its main business segments.