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Jobs report sinks stocks

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Friday morning brought the highly-anticipated April non-farm payrolls report from the Department of Labor’s Bureau of Labor Statistics (BLS). Although economists had been anticipating in increase of 165,000 jobs, the report disclosed that only 115,000 jobs were added. In other words, the headline number was 50,000 short of what was anticipated, missing economists’ expectations by a huge 31 percent. The weak 115,000 total failed to match the 120,000 jobs added in March. Here is the key passage from the report:

Nonfarm payroll employment rose by 115,000 in April, and the unemployment rate was little changed at 8.1 percent, the U.S. Bureau of Labor Statistics reported today. Employment increased in professional and business services, retail trade, and health care, but declined in transportation and warehousing.

* * *

The civilian labor force participation rate declined in April to 63.6 percent, while the employment-population ratio, at 58.4 percent, changed little.

The futures market reacted to the bad news immediately. The disappointing jobs report followed bad news from Europe, where evidence of economic contraction continues to mount. Friday’s latest European recession signal was the downbeat Eurozone Composite PMI for April from Markit Economics. The Composite Output Index was 46.7 (down from 49.1 in March). Economists were expecting a less-significant decrease to 47.4. The decline brought the index to its lowest level in three years.

A solidly bearish mood had been established before Friday’s opening bell. Once trading started, Miami-based corporations saw their stocks take steep declines.

The Dow Jones Industrial Average took a 168-point nosedive on Friday to close at 13,038 for a 1.27 percent loss. The S&P 500 declined by 1.61 percent to finish at 1,369. The NASDAQ Composite swooned by 2.25 percent to end the day at 2,956.

Miami-based corporations had a disastrous day on Friday. Carnival Cruise Lines (CCL) suffered the least damage with a loss of 86 basis points (0.86%) to close at 32.26. Lennar (LEN) lost 1.16% to finish at 28.12. Royal Caribbean (RCL) sank by 2.47% to close at 26.83. Ryder System (R) suffered a huge 3.12% loss to end the day at 47.26.

The following companies will be playing “beat the number” on Monday, with the release of their quarterly earnings reports: American States Water (AWR), Audiocodes (AUDC), Avis Budget Group (CAR), California Water Service Group (CWT), China Bak Battery (CBAK), China Green Agriculture (CGA), Cognizant Technology Solutions (CTSH), Dendreon (DNDN), Dish Network (DISH), Dixie Group (DXYN), Essex Crane Rental (ESSX), Jamba (JMBA), Lufkin Industries (LUFK), Nautilus (NLS), PetMed Express (PETS), Pitney Bowes (PBI), Rackspace Hosting (RAX), SeaCube Conatiner (BOX), Sysco (SYY), WP Carey (WPC) and Wynn Resorts (WYNN). Good luck!

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