Market briefing --- Lane (fast)
Job report --- Peter (slow)
NYSE --- Julie (slow)
Oil prices --- Su (fast)
welcome to “world financial report.” we’re glad you’ve joined us, i’m lane bajardi in new york. the unexpected slowdown in jobs and a fourth straight day of record oil prices weighed on u.s. benchmark indexes. the dow jones industrial average down on the day by 70 points at 10,055. the s&p 500 lower by .75% or 8.5 points. and the nasdaq down 28.5 points, 1.5%, settling at 1919. he labor department reports u.s. employers added fewer workers in september than economists expected. the report raises questions about the strength of the economy and it expected to be a hot topic as the presidential election date nears. bloomberg’s peter cook has detail it’s jobs and filed this report.
>> a lot of disagreement going into the jobs report as to what it would show given the hurricanes and other factors in september and the headline number did not meet economists expectations. the economy added 96,000 jobs in september, the median forecast of our survey of economists heading in was 148,000. also, the august figure was revised down to 128,000 from the original figure of 144,000. looking at the manufacturing sector, economists expected job gains there. instead, there was a loss of 18,000 jobs and the august number was revised down, as well. the c.e.o. of the world’s largest executive search firm says the numbers don’t match what he sees in the economy.
>> we were expecting a bigger number but from our standpoint, we’re seeing great demand in all the recruiting sectors and we may be leading that charge with reported last quarter 40% growth year on year but we see it in all the staffing companies so from a client perspective, c.e.o.’s are saying they’re hiring, economically they’re opt mirk―optimistic about the future.
>> the labor department says hurricanes in the south slowed employment growth but not enough to have a material effect on the treasury report. treasury secretary john snow points to the unemployment rate, holding steady at 5.4% in september and says what’s important is the labor market is moving in the right direction.
>> the economy is in a recovery. 13 straight months of job pickup. and we’re on the right path. we’re not satisfied, but we’re clearly on the right path. the economy’s turned the corner and is going the right way.
>> part of the economy he’s talking about is doing well in the boardroom but if you live on a pay stub, your wages are flat, energy costs are at record high numbers, healthcare costs have gone up by 1/3 under this administration, college costs are up by 1/3 and personal bankruptcies are up by 1/3.
>> democratic presidential candidate john kerry calls the numbers disappointing and his advisers say it will be a hot topic tonight at kerry’s second debate with president bush. one other piece of good news for the president in this report, a preliminary revision of the 12 months ending last month shows the economy added 236,000 more jobs than first thought in that 12-month period. in washington, peter cook, bloomberg news.
>> and the jobs report had a definite effect on the treasury market . u.s. treasury notes rising for the first day in four. speculation that the federal reserve may only raise its benchmark interest rates once more this year. the 10-year note, yield at 4.13%, up on the day nearly a full point. semiconductors led stocks lower. julie hyman has a wrap of the week’s trading from the new york% -stock exchange.
>> stocks ended the week lower and ended the day lower, though not at the lows of today’s session. a number of factors driving us down today. we had three main elements, first, the jobs report this morning which came in weaker than expected. oil rising once again to a record. we also had semiconductors, in particular, putting a lot of pressure on the market . for the week, the dow ended lower by a little more than 1%. the s&p also ended lower 1%. i wanted to look at the energy stocks because they were gaining in today’s session, one of the few bright spots in the market . however, oil put pressure on the rest of the market as a whole. semiconductors, in particular, also falling. advanced micro devices lost a court bid for sealed documents in a case accusing intel of anti-competitive practices in europe. incidentally, intel is out with earnings next tuesday. some of the other semiconductor companies down today included texas instruments, national semiconductor as well as micron. as for the jobs report, it had a direct impact on employment services stock so we awe manpower falling, korn/ferry international and robert half. g.e. came out with profit, falling in today’s session although the company said third-quarter profit was up 11% and matched analysts’ estimates and narrowing their forecast for the year to the upper end of their previously announced range. however, it looks like the general weakness in the market affected g.e. also, they saw weakness in media holdings, notably nbc. i’m julie hyman, bloomberg news at the new york stock exchange.
>> in another big story today, oil at yet another record. crude rising to a record $53.40 after the louisiana offshore oil port shut because of rough seas, limiting the arrival of shipments to the u.s. looking at today’s close, $53 .31, up 64 cents or 1.2%. looking ahead to next week, most traders and analysts predict still higher prices. more than 70% of those surveyed by bloomberg say crude oil futures will continue to rise next week. su keenan reports some traders are starting to talk about the possibility of oil at $100 a barrel. su?
>> well, this latest survey from bloomberg shows that respondents are significantly more bullish and giving never before heard estimates for how high oil prices could go. of the 45 traders and analysts surveyed by bloomberg, 73% predict new york oil futures will rise beyond today’s record price, going into next week. this is the biggest margin in favor of a gain in the six months that bloomberg has been conducting the survey. barkley capital’s analyst says there are so many different supply-related factors driving the rally, we could see oil at $70 a barrel by the end of the year.
>> unlimited potential. we could see $60, $70 and if all worst case worst-case scenarios happen, $100 is not outside the realm of possibilities.
>> the analysts for refco say the new and higher worst-case scenario prices for oil come from a confluence of events, such as the potential supply disruptions in nigeria and norway.
>> it’s the confluence of events, the fact that we don’t have a great deal of spare capacity within opec right now and if we get nigeria or venezuela or a bigger strike in norway, it’s that impacting that with the fact that demand is very strong right now so you have to keep an eye a number of things right now, a number of small potser boiling in the oil world, which is giving us this cocktail of higher prices.
>> what a cocktail. he says in the event of such a major disruption, which he doesn’t see happening, all bets for oil prices are off. the latest supply concerns involve the third shutdown this month of the louisiana offshore oil port. it handles about a million barrels of crude oil a day, 10% of u.s. imports. fimat’s michael fitzpatrick says we can’t afford to lose one drop of oil. robert froehlich is telling investors who want to ride the rally to invest in stocks.
>> one of the neat ways to play it is you look at the energy sector, at the material sector and if you’re concerned that energy has had its run, which we don’t think it has, look at the material sector because that’s a great way to play what’s going on in the commodities because that’s the stock market proxy for commodity prices.
>> what’s happening in commodity prices as oil futures are up 79% in the past year.
>> su keenan, thanks. 20 years ago, at&t had more than 1 million people on its payroll. yesterday, the company announced that by year end it will employ only 40,000 people. over the years there were many spinoffs to other companies that employ many people. coming up, we’ll bring you the bloomberg news interview with at&t chief david dorman about their future.
