Dow Jones Industrials (DJINDICES:^DJI): 15,762 (+0.9% last week, +20.2% YTD)
S&P 500: 1,771 (+0.5% last week, +24.2% YTD)
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The start of November has us pumped for calorie-worshiping fall desserts (like these 17 beauties) that we want to stuff our MarketSnacks faces with -- but the beginning of November also means the big monthly jobs report. Check out what shook Wall Street up and down all the headline-packed week long leading up to the big employment news.
1. Jobs report
The U.S. economy just stepped up its game big time. The Labor Department released its October non-farm payrolls report, showing the nation added 204,000 jobs, nearly twice what analysts expected. Plus, September and August's job gains were revised upward. The only slight negative was that the unemployment rate ticked up to 7.3% from 7.2%, but overall investors were (relatively) joyous. The report was so good that investors weren't overly worried about whether the good news might bring the Federal Reserve to slow its stimulus policies -- sending the Dow up a hefty 167 points Friday (1.1%) to a record 15,762 points.
2. Twitter's flyin' IPO
Twitter's flying off the handle (see what we did there? Two Twitter puns in one sentence). The succinct-social-network's eagerly anticipated IPO was Thursday, and shares jumped in price from $26 to $45 almost immediately, with no reporting glitches on the New York Stock Exchange (unlike that @Facebook #IPO). Wall Street likes to see a good, healthy pop on IPO day as a sign of enthusiasm for the stock, but not too much of a gain, which would indicate the company should have been priced higher -- investors were pumped, though, about Twitter's 73% gain that valued the company at $24 billion after Day 1. Twitter may have no profits, but it just raised $1.3 billion by offering stock to the public.
3. Third-quarter earnings winners ...
Tinker Bell must have been all over Disney's financials, because the entertainment giant's earnings were magical thanks to blockbusters such as The Avengers, TV revenues from ESPN, and the best theme-park attendance in its history (plus they announced the new Star Wars film). Speaking of TV, DirecTV earnings topped expectations thanks to a rise in subscribers. Plus, pink-filled T-Mobile earnings soared as its "uncarrier movement" to end two-year cell phone contracts snagged 1 million new users last quarter alone.
4. ... And third-quarter earnings losers
AOL earnings got no mail and no good numbers after the dying Internet company had to restructure its failed local news experiment, Patch. Someone yanked the plug on electric supercar Tesla, as the company sold fewer Model-S vehicles than expected, resulting in a third-quarter loss after its first ever profit in the second quarter (another recent car fire didn't help). And Abercrombie & Fitch earnings disappointed as the company closes its failed Gilly Hicks underwear stores and lowered Christmas sales expectations (maybe it's time for the models to start wearing the actual clothes they're selling).
5. Plenty of corporate drama for SAC and BlackBerry
It's like Real Housewives of Canada over there at Ontario-based BlackBerry. First the struggling "smart" phone manufacturer announced that Fairfax Holdings will sadly not be purchasing the company because it couldn't get enough financing together -- instead, it's sticking a borrowed $1 billion into BlackBerry and firing CEO Thorsten Heins. Over in Stamford, Steven A. Cohen's hedge fund SAC Capital Advisors pleaded guilty to four counts of criminal insider trading. That's the first major guilty plea in decades of a major Wall Street firm, as well as a big win for the Manhattan DA (not Harvey Dent, unfortunately), and it means Cohen owes a cool $1.2 billion out of pocket.
6. GDP and Fed papers stirred stimulus rumors
Investors have been schvitzing all 2013 about when the Federal Reserve will slow its stimulus policies -- specifically, the quantitative easing program that buys $85 billion in long-term bonds monthly to keep interest rates low to encourage borrowing. Two new developments last week added fuel to the uncertainty. First, a couple of top economists at the Fed released two papers to the IMF arguing that stimulus needs to continue for the foreseeable future. Second, the first reading of U.S. GDP growth showed the economy grew 2.8% last quarter, well above 2% growth expectations -- and to Wall Street, good econ news means the Fed might end stimulus sooner. What a conundrum.
What MarketSnacks is checking out this week:
- Monday: Markets Open, Banks Closed for Veterans Day
- Tuesday: NFIB Small Business Optimism Index, Third-Quarter Earnings: DISH Network, News Corp.
- Wednesday: Fed Chairman Ben Bernanke speaks in D.C., Earnings: Sea World.
- Thursday: Weekly Jobless Claims, International Trade Report, Earnings: Burberry, Wal-Mart.
- Friday: U.S. Industrial Production, New York Fed Manufacturing Report