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Markets End Mixed on "Jobs Friday"

By Matt Thalman - Mar 7, 2014 at 9:00PM

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Nike gets a boost as one of its retailers posts better than expected earnings.

The first Friday of each month has been dubbed "Jobs Friday" by Wall Street and the media, as the previous month's jobs report is released on that date. Today just so happened to be the first Friday of March. This morning, the Labor Department released its February non-farm employment data, which indicated that 175,000 new jobs had been created, a figure higher than the 150,000 economists expected. In addition, the report indicated that the actual unemployment rate rose from 6.6% to 6.7% during February due to a higher workforce participation rate. While that figure alone makes it sound like the economy is heading in the wrong direction, a larger workforce would indicate that more Americans will now have an income and, therefore, the ability to further stimulate the economy. 

The jobs report briefly pushed major indexes higher this morning, but when the closing bell rang, they were mixed. The Dow Jones Industrial Average ( ^DJI 0.53% ) was up 30 points, or 0.2%, the S&P 500 ended up 0.05%, and the Nasdaq was down 0.37%.

Within the Dow, one winner was Nike ( NKE 0.69% ), as shares rose 1.59%. The likely cause of this move was the quarterly earnings report from Foot Locker ( FL -0.25% ). Foot Locker posted earnings per share of $0.82, beating Wall Street's estimate of $0.76. Sales were up 4.6%, as the company posted revenue of $1.79 billion, which also beat estimates of $1.76 billion. So why does this matter to Nike? Almost two-thirds of the shoes that Foot Locker sells are Nike's. Nike is scheduled to report earnings on March 20, and it's likely that Foot Locker's increased revenue will translate into higher sales for Nike. 

Outside the Dow, one big mover was Staples ( SPLS ), a stock which fell 15.3% yesterday after the company posted quarterly earnings in which revenue, margins, and profits were all lower. Furthermore, the company announced that it would be closing 225 stores as a way to help cut costs. Today, shares were up 1.14%, as volume of 22 million shares was more than twice the normal trading amount of just 10 million. What investors need to know is today's move higher doesn't mean much at all. The stock was pounded yesterday and, in most cases when that happens, shares bounce back slightly the following session. Today was likely just a flurry of investors trying to catch the bounce. Investors need to remember that Staples has some very fundamental issues as consumers use technology more, and need fewer office supplies. Additionally, the company is competing with online retailers and Wal-Mart and Target, who can, quite frankly, sell products cheaper. Therefore, they will ultimately get the customers.

One retailer that did have a great day was Big Lots ( BIG -0.25% ) as shares rose 22.97%. The move was the result of a quarterly report in which revenue came in at $1.64 billion, above the $1.61 billion Wall Street was expecting. Earnings hit $1.45 per share, beating the $1.40 that analysts expected. Analysts had cut their earnings estimate of $2.11 per share back in the fall, so while this was a beat on the surface, investors still should be concerned about the company's future. Furthermore, moving forward, management believes that same-store sales will be flat to up 2%, and the company expects to close 50 stores while opening 30 in 2014. Those figures don't sound like an investment that is a sure winner. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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Stocks Mentioned

Dow Jones Industrial Average (Price Return) Stock Quote
Dow Jones Industrial Average (Price Return)
^DJI
$34,665.57 (0.53%) $181.85
NIKE, Inc. Stock Quote
NIKE, Inc.
NKE
$170.41 (0.69%) $1.17
Staples, Inc. Stock Quote
Staples, Inc.
SPLS
Big Lots, Inc. Stock Quote
Big Lots, Inc.
BIG
$43.27 (-0.25%) $0.11
Foot Locker, Inc. Stock Quote
Foot Locker, Inc.
FL
$45.52 (-0.25%) $0.12

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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