Painfully Slow Jobs Growth Drags Down the Dow

Jobs posted their slowest monthly growth in three years, while Chevron and Pfizer are among the Dow's top losers today

Jan 10, 2014 at 2:30PM

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

The Dow Jones Industrial Average (DJINDICES:^DJI) continues its trek lower this week. The Dow has shed 40 points as of 2:15 p.m. EST, with its biggest movers diving into the red after jobs data disappointed investors with a fresh round of economic concern. Among top blue-chip stocks, Chevron's (NYSE:CVX) taking a big hit after announcing a worrying trend for its fourth-quarter production, while Pfizer's (NYSE:PFE) among the Dow's leading laggards in the health care sector. Let's catch up on what you need to know.

One very bad jobs report
The jobs reported blindsided investors today with severely unexpected bad news, as payrolls added just 74,000 new jobs in December. That wasn't just the worst monthly mark for 2013: It marked the slowest increase in jobs for one month since January 2011, adding new speculation that the economy's rise is still sorting out bumps in the road. Economists had expected that more than 190,000 jobs would be added to the economy in December.

As a lone bright spot, the U.S. unemployment rate did fall to 6.7%, the first time it had declined below 7% in five years. That's not due to job gains, however -- it's because nearly 350,000 Americans gave up looking for jobs and dropped out of the labor force in December. While the economy did add a total of 2.2 million jobs in 2013 -- roughly what 2012 produced, a strong number -- the U.S. economy's growth needs a lot higher job growth than December's meek number.

Chevron's not inspiring much confidence in investors today, either, as the Big Oil stock is down 2% to lead all Dow laggards. The company announced today that its fourth-quarter net profit will stand roughly on par with the third-quarter profit mark of $5 billion after Chevron's gas and oil production fell. The company's 2.56 million barrels of crude oil produced during October and November is a 3.9% year-over-year drop, following weakening demand that has hit production across several of the company's competitors as well.

Falling demand has affected Chevron's finances in a bad way lately, as the company's revenue fell by 4.7% and its earnings per share also declined over the first nine months of 2013. While analysts are optimistic about a return to production growth in 2014, investors have to hope oil prices make a comeback for the majors in the new year.

Pfizer stock is down around 1% after Cowen downgraded the Big Pharma from outperform to market perform. While Pfizer has had a strong 15.5% run-up over the past year, there's no reason to panic just yet about this company's ability to perform in the new year. The worst of the patent cliff is over for Pfizer, after plunging revenue to former top-selling drug Lipitor slammed sales last year. Expect those losses to ease in the new year, while up-and-coming drugs such as Xeljanz and Eliquis, which struggled to gain much traction last year, should start to garner momentum in 2014.

How you can make money despite economic uncertainty
Despite job losses today, stocks like Pfizer have soared since the recession. Still, millions of Americans have waited on the sidelines since the market meltdown in 2008 and 2009, too scared to invest and put their money at further risk. Yet those who've stayed out of the market have missed out on huge gains and put their financial futures in jeopardy. In our brand-new special report, "Your Essential Guide to Start Investing Today," The Motley Fool's personal finance experts show you why investing is so important and what you need to do to get started. Click here to get your copy today -- it's absolutely free.

Fool contributor Dan Carroll has no position in any stocks mentioned. The Motley Fool recommends Chevron. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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