The stock markets in the United States gained after the Department of Labor reported that the economy created 169,000 jobs in August. However, the Dow Industrials declined after the market close due to concerns over military action in Syria.
The unemployment rate declined to 7.3 percent because many people (312,000) dropped from the labor force. In an interview with CNBC, Christina Romer, former chairperson of the Council of Economic Advisers of the Obama Administration, said that one-half of the people who were dropping out from the labor force were teenagers, which is less troublesome. The data shows that the economic recovery is still moving at a slow pace.
Economists believe that the slower-than-expected job growth alleviated concerns regarding the plan of the Federal Reserve to reduce its $85 bond purchase program. They projected that the reduction would be around $10 billion based on data compiled by Bloomberg.
Kristina Hooper, investment strategist at Allianz Global Investors, said, “What the jobs report told us is that it’s a slow recovery, but it’s a recovery, so that while the Fed is likely to taper in September, it won’t be surprising to see a tiny taper as the Fed tries to wean the market off quantitative easing.” She added that the reduction would be minimal in impact of stocks.
- Dow Jones Industrial Average (DJIA)- 14,921 (-0.11%)
- S&P 500- 1,655 (+0.00%)
- NASDAQ- 3,660 (+0.03%)
- Russell 2000- 1,030 (+0.18%)
- EURO STOXX 50 Price EUR- 2,803 (+1.05%)
- FTSE 100 Index- 6,547 (+0.23%)
- Deutsche Borse AG German Stock Index DAX- 8,275 (+0.49%)
Asia Pacific Markets
- Nikkei 225- 13, 860 (-1.45%)
- Hong Kong Hang Seng Index- 22, 621 (+0.10%)
- Shanghai Shenzhen CSI 300 Index- 2, 357 (+0.68%)
Stocks In Focus
The stock price of American Tower Corp (NYSE:AMT) increased by nearly 5 percent to as much as $72.43 per share after announcing its agreement to purchase MIP Tower Holdings LLC for $4.8 billion. The deal allows the company to expand its operations in the United States by acquiring MIP’s 5,400 cellular towers and other properties. According to American Tower, the acquisition would add more than 15,000 sites to its existing 56,000 sites globally. The company expects to generate $345 million sales and approximately $270 million in gross margin from the acquisition.
Mattress Firm Holding Corp (NASDAQ:MFRM) plummeted by more than 14 percent to $35.59 per share after the company cut its profit guidance for the fiscal 2014 in the range of $1.66 to $1.74 per share. The company projected to achieve $1.194 billion to $1.207 billion sales. Mattress Firm’s previous estimates were $1.81 to $1.89 earnings per share and $1.237 billion to $1.250 billion sales for FY 2014.
The Timken Company (NYSE:TKR) surged by more than 2 percent to $61.52 a share, after confirming its plan to split itself into two publicly traded companies. The company said it will separate its steel business from its bearings and power transmissions unit.
VeriFone Systems Inc (NYSE:PAY) gained more than 10 percent to $22.81 per share after the maker of credit card terminals reported better-than-expected third quarter earnings results. The company also provided a sales guidance of $418 million, higher than the $412.9 million consensus estimate of analysts for the fourth quarter. The company posted $0.24 earnings per share on $417.5 million revenue in the third quarter.