Option Investor
Market Updates

Unemployment rate falls to 5.7% as companies add jobs

Printer friendly version

Stock futures have jumped from unchanged levels after the Labor Department said U.S. businesses added approximately 143,000 workers in January, which was better than the 69,000 forecast from economists and strongest sign of job growth since November 2000.

The Labor Department said the new job additions had the nation's unemployment rate falling to 5.7% from 6.0%. The decline in the unemployment rate was also attributed to a revision in December's report to a decline of 101,000 from previously reported loss of 156,000 jobs.

Subsets for the January non-farm payroll data had hourly earnings unchanged, which was below the 0.3% gain forecasted by economist's, while average hours worked per week was flat at 34.2 worked per week and inline with expectations.

The welcomed news on the labor front has S&P futures (sp03h) showing a gain of 6.3 points at 846.50, after having traded unchanged for the bulk of last night's session. NASDAQ futures (nd03h) have also jumped from unchanged levels and post a 9.5 point gain at 984.50, while Dow futures (dj03h) show a 40-points gain at 7,980.

Fair value for the S&P 500 today is $0.00. That price will not change during the session. HL Camp & Company has their computers set for program buying at $0.10 and set for program selling at $-2.52. Fair value for the NASDAQ-100 today is $1.32.

While stock futures got a lift from this morning's unemployment report, Treasuries have found selling across the major maturities. The 10-year Treasury futures (ty03h) 113'310 -0.32% is falling 12/32, which has the benchmark bond's YIELD ($TNX.X) rising to 4.0%.

Stock on the move have shares of Electronic Data Systems (NYSE:EDS) $15.75 falling 60-cents, or 3.8% to $15.15 over the New York ECN after reporting Q4 (December) earnings per share of $0.51, which was 3-cents better than consensus. However, EDS guided lower for its upcoming Q1, saying it sees ESP of $0.30- $0.35, which was well below consensus estimates of $0.42 per share. For 2003, company sees EPS of $1.80-$2.00 per share, which was a lower range than the $2.03 consensus. The company said, "While the potential for increasing geopolitical risk and the related subsequent impact on certain industry segments has not been factored into the guidance, the company has taken a cautious view of the marketplace."

Shares of Scios (NASDAQ:SCIO) $34.69 are surging higher at $41.25, or 18.9% after the Wall Street Journal reported that Dow component Johnson & Johnson (NYSE:JNJ) $52.12 is in advanced talks to buy SCIO for $2 billion, or $45.00 per share. The Journal said the two companies have been having more frequent discussions in the past several weeks, but no deal has been reached and another bidder could still emerge.

Jeff Bailey

Intraday Update Archives