After news out of Ukraine dominated the markets for the first two days of the week, trading was calmer today as investors responded to a tepid jobs report from ADP and remarks from the Fed on the current state of the economy. The Dow Jones Industrial Average (^DJI 1.26%) finished down 36 points or 0.2%, while the S&P 500 closed essentially unchanged, down 0.1 points from yesterday's record.
The nation's biggest payroll processor said 139,000 jobs were added in February, short of analyst estimates at 150,000, but up slightly from last month's total of 127,000. Mark Zandi, chief economist of Moody's Analytics, cited "bad winter weather" for the poor growth numbers, and said, "Jobs growth is expected to improve with warmer temperatures." In its beige book report, a survey of the nation's 12 economic districts, the Federal Reserve confirmed Zandi's conclusion, saying that economic activity slowed in New York and Philadelphia due to severe weather, but eight of the districts saw "modest to moderate" growth. Finally, the ISM Services report showed declining activity in that sector as its index fell from 54.0 to 51.6, worse than estimates of 53.5.
Among stocks making news today was Target (TGT 3.34%), as its chief information officer, Beth Jacob, resigned in the wake of the retailer's data-breach scandal, which saw hackers access more than 40 million credit card numbers. Target said Jacob made the choice on her own, but it's easy to speculate that she was forced out. Jacob's departure may be an important step for the company to move past the security failure, and Target also said it would accelerate its roll-out of a $100-million chip-based credit card technology initiative, which is considered more secure that the traditional magnetic strip. The effects of the data breach have been significant as sales fell off 5.3% last quarter and profits dipped 46%. The stock had fallen as much as 12% in the intervening time period, but has mostly recovered as its earnings report was not as bad as feared. Shares fell 1.2% today.
Back on the Dow, ExxonMobil (XOM 0.15%) was the blue chips' worst performer of the day, falling 2.8% after releasing disappointing guidance for the year. The energy giant said it expects flat output for the year, but sees expenses falling 6%, news that disappointed investors who had hoped to see growth in production return. So-called easy oil has been harder to find for majors like Exxon and Chevron, and production has generally been on the decline for the past few years. While share buybacks and cost-cutting measures should assure investors that earnings per share will grow, flat or declining production is no long-term strategy for success. Still, analysts expect output to increase from 2015 to 2017 at a growth rate of 2%-3% as the company says it has more profitable projects coming on line.