Stocks had a tough day on Thursday, as investors worried about the upcoming non-farm payrolls report, due on Friday. Miami-based companies had mixed results, with Ryder System (R) getting crushed after the release of its quarterly earnings report.
Wednesday’s bullishness (which gave the Dow Jones Industrials an 83-point boost) resulted from an upbeat report from the Commerce Department on construction spending. December’s construction was up 1.5 percent from the revised November 2011 estimate and up 4.3 percent from December 2010.
Thursday’s “less bad” report on initial unemployment claims helped soothe the nerves of those worried about Friday’s non-farm payrolls report:
In the week ending January 28, the advance figure for seasonally adjusted initial claims was 367,000, a decrease of 12,000 from the previous week's revised figure of 379,000. The 4-week moving average was 375,750, a decrease of 2,000 from the previous week's revised average of 377,750.
The Dow Jones Industrial Average declined by 11 points on Thursday, to close at 12,705 for a loss of 9 basis points (0.09 percent). The S&P 500 gained 11 basis points (0.11 percent) to finish at 1,325. The NASDAQ Composite advanced by 40 basis points (0.40 percent) to end the day at 2,859.
Miami-based corporations had a lousy day on Thursday. Royal Caribbean (RCL) led the group with a gain of 1.59% to close at 28.69. Carnival Cruise Lines (CCL) followed in RCL's wake, advancing by 81 basis points (0.81%) to finish at 31.16. Lennar (LEN) declined by 41 basis points (0.42%) to close at 21.74. Ryder System (R) had the worst luck, sinking by 6.88% to end the day at 53.02.
Our “thought for the day” comes from Comstock Partners:
Although the strong point of the economy until now has been corporate earnings, even this area is showing some early signs of faltering. Only 59% of corporations so far have beat fourth quarter earnings expectations, the lowest since the third quarter of 2008, while only 43% exceeded revenue forecasts, the lowest since the first quarter of 2008. The combined results for those who have reported and the estimates for those yet to report show an increase of 11.5% over a year earlier. The increase, however, would be only 1% without AIG and Apple. Furthermore, the number of companies reducing guidance exceeded those raising guidance by about 3%. In view of our outlook, we think that earnings disappointments will mount throughout the year.
The following companies will be playing “beat the number” on Friday, with the release of their quarterly earnings reports: Abiomed (ABMD), American Axle and Manufacturing (AXL), Aon Corp (AON), Beam Inc (BEAM), Brown & Brown (BRO), Estee Lauder (EL), Health Net (HNT), Imation (IMN), Macerich (MAC), Modine Manufacturing (MOD), Moneygram International (MGI), National Fuel Gas (NFG), OneBeacon Insurance Group (OB), Simon Property Group (SPG), Spectra Energy Partners (SEP), Spectrum Brands (SPB), Clorox (CLX), Tyson Foods (TSN), Weyerhaeuser (WY) and WGL Holdings (WGL). Good luck!
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