Jobs Report Disappoints as Sears and Target Fall

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis

Stocks held steady once again today despite an atrocious employment report from the Department of Labor, which reported that just 74,000 jobs were added last month, way below expectations of 197,000. Despite the shortfall, the unemployment rate fell to 6.7% as fewer Americans were looking for work, and the government agency revised upward the total of jobs added in November from 203,000 to 241,000. The number of unemployed Americans fell 490,000, to 10.4 million, and the number of job losers declined by 365,000, to 5.4 million. Colder weather than normal also seemed to be responsible for the slowdown in hiring. The Dow Jones Industrial Average (DJINDICES: ^DJI  )  barely changed, falling 0.05%, or eight points, as investors had mixed reactions to the employment report. Bond yields fell as the market seemed to believe that the poor jobs report would lead the Federal Reserve to extend its bond-buying program longer than previously expected.

The Federal Reserve itself downplayed the disappointing tally. St. Louis Fed President James Bullard said: "I would be disinclined to react to one month's number. For now we're on a program where we're likely to continue to taper (asset purchases) at subsequent meetings."

Among the market's losers today was Sears Holdings (NASDAQ: SHLD  ) , falling 14% after reporting miserable same-store sales for the holiday season. The retailer said that comparable sales fell 7.4% at companywide locations, and 9.2% at Sears Domestic locations. Sears stock fell to a two-year low on the news, and the company also said it expects a per-share loss of $2 to $3 for the fourth quarter. The report underscores Sears' growing problems in the retail sector as its operational losses continue to mount. With management focused on harvesting the company's brand and real estate assets, the stock figures to continue falling as the negative cash flow piles up.

Elsewhere, Target (NYSE: TGT  ) shares fell 1.1% as the big-box retailer admitted once again that its data breach was worse than expected. In its revised report, the company said that the data breach had affected up to 70 million customers. CEO Gregg Steinhafel apologized, saying, "I know it's frustrating to learn that this information was taken and we are truly sorry they are having to endure this." Separately, the company lowered its fourth quarter to $1.20 to $1.30 from $1.50 to $1.60, and reported a same-store sales decline of 2% to 6%. Still, the fact that the stock only fell 1% seems to reflect the market's belief in its long-term potential.

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