Markets Falling After Jobs Report Comes in Below Estimates

Wal-Mart and Potbelly both rise after analysts' comments, while CarMax falls after missing expectations.

Matt Thalman
Matt Thalman
Apr 4, 2014 at 1:00PM

The Labor Department today said that 192,000 new nonfarm jobs were added to U.S. payrolls in March, a moderate miss from economists' expectation of at least 200,000 jobs. Unemployment remained at 6.7% but that was likely due to the fact that the workforce increased by 500,000 people. The higher the workforce participation rate, the healthier the economy should be.

But despite the strong jobs report, the major U.S. indexes were all heading lower as of 1 p.m. EDT. The Dow Jones Industrial Average (DJINDICES:^DJI) was down by 75 points, or 0.46%, the S&P 500 dropped by 0.85% and the Nasdaq hammered by a 2.5% fall.


Within the Dow, shares of Walt-Disney (NYSE:DIS) were down 0.9% even after Merrill Lynch increased its price target on the stock to $94. The price change resulted from Disney's success with the animated film Frozen. This past weekend the film became the top grossing animated movie ever, and it now sits in the No. 10 spot on the list of biggest blockbusters of all time. Furthermore, the movie is the best-performing Disney or Pixar animated film in 27 different countries, including large markets such as Brazil, Russia, and China. The film is clearly not only a blockbuster for Disney, but should help the company attract new customers to its theme parks and help boost merchandising sales. 

Another stock getting a nice review from an analyst is sandwich shop Potbelly (NASDAQ:PBPB), which is up more than 5.3%. The move comes following a rough patch for the stock in which it has fallen from $33.90 per share down to yesterday's close of $17.12, as investors grow concerned about the future growth prospects of the company. However, an analyst from William Blair increased the stock's rating from market perform to outperform, saying that the recent decline in the share price and the reduced valuation leave limited downside risk in the stock. Furthermore, high interest from investors could send shares higher if same-store sales trends come in favorable. Neither reason given by the analyst is based in any hard data about the company. Investors may not want to jump on this bandwagon based solely on one analyst's opinion.  

On notable loser today is CarMax (NYSE:KMX), as shares are off by 4% following the company's quarterly earnings release in which both revenue and earnings came in below analysts' estimates. Revenue was reported at $3.08 billion, while analysts had anticipated $3.18 billion. Earnings per share came in at $0.44, while Wall Street was looking for $0.53. The company saw a 12% increase in car sales, and financing income was up 6%, but increasing cancellation reserves cost cut into CarMax's earnings during the quarter. Today's move seems a little overblown considering that the earnings miss was not due to poor operations.