Market briefing---Matt (slow)
Numbers---Ellen (slow)
NYSE---Deb (fast)
Political agenda---Mike (fast)
looking at the 10- and five-year notes. the yield on the 10-year bond yesterday was 4.24 and we’re at 4.08 today, a huge one-day move. the five-year also strong today. looking at the three-year and two-year notes, as well, moves on the short end of of the curve
>> starting with the headline unemployment rate. it fell to 5.7% from 5.9%. the reason for that is not more hiring but people leaving the work force. the work force shrunk by more than 300,000 people last month. the real disappointment today, though, and the headline for the markets is the non-farm payroll number. it was a huge miss and shock to the market. only 1,000 jobs were added in december. economists were looking for 150,000. another negative, it turns out that october and november were both worse than the government previously reported. only 43,000 jobs were created in november. that’s 14,000 less than the department of labor said initially. inauk―in october, 100,000 jobs created, 47,000 fewer than previously reported. an important number is the manufacturing number. manufacturers lost 26,000 jobs in december, marking the 41st consecutive months of job losses in american factories, a disappointment to economists. looking at other industries, disappointment for retail. given a fairly strong holiday shopping season, this number was a negative surprise. we saw declines in employment and financial services. on the upside, december was the eighth month in a row in gains in temporary employment and gains in construction fueled by continued strength in the housing market. another area of job gains was heb. we had―in healthcare, 14,000 jobs created there. the biggest operator of psychiatric hospitals in the united states was among those adding to the payroll.
>> we will be acquiring five hospitals and we bring a few thousand people along with those hospitals so it’s difficult to separate out the same store from the overall total but we’re probably up 5% to 6%.
>> another positive from the report today was an increase in wages, rising .2% in december, in line with forecasts and although it may sound small, it does translate into an annual rate of 2.5%. that is above inflation, meaning it increases purchasing power for workers. back to you.
>> turning now to how today’s jobs data played out in other markets, if we can, we’ll look at the dow, s&p and nasdaq. those aren’t necessarily other markets but the benchmarks, all lower as you can see. the dow, the worst performer on the day and the tech-heavy nasdaq performing the best with only .6% decline. new york stock exchange volume and nasdaq volume for that matter both above their averages. 1.6 billion on the new york stock exchange and the nasdaq at 2.4 billion. the average there for the past six months is 1.7 billion shares traded. in the broader indexes, the wilshire 5000 also lower today, about .75%. and the currency markets, another new high for the euro, 1.28, a milestone by the wayside, the dollar falling against both its european peers but gaining a little ground against the yen. the disappointing job numbers are putting the economy back on the political agenda. michael mckee joins us from washington with the administration’s reactions to the numbers. mike?
>> this was not the sort of jobs number the white house hoped for. the iowa caucuses and new hampshire primary are coming up as are president george w. bush’s state of the union address and having just 1,000 new jobs created gives democrats something to criticize and bush little to crow about. bush talked about the jobs numbers this morning during an event at the commerce department and says he’s optimistic about the nation’s economy but work needs to be done.
>> i am optimistic because i see things happening. unemployment dropped today to 5.7%. that’s not good enough. we want more people still working, but nevertheless, it is a pos positive sign that the economy is getting better.
>> democrats, no surprise, are making job growth an issue, pointing out repeatedly that mr. bush may be the first president since herbert hoover to preside over a net job loss in his first term. gene sperling says the timing of the numbers are particularly bad given the presidential primaries and state of the union speech.
>> this has to be very depressing for those working on the white house state of the union speech. he’ll certainly still say that things have improved but it will now have to be very, very nuance and he knows if he’s too optimistic, the democratic response will be right there saying is president bush saying 1,000 jobs a month is good enough? i don’t think so.
>> sperlings today’s jobs report will give democrats new confidence to challenge bush on the economy. richard gephardt called the jobs number nothing short of pitiful. but the white house’s head of economic advisers said job growth will happen but declined to say how much or when.
>> thank you very much. moving now from washington right to downtown wall street, where that jobs report was definitely all the buzz. deb kostroun at the big board with the impact on the markets.
>> matt, a lot of conflicting emotions about the jobs report mainly because many traders say the market was expecting a blowout gain. we really only got a―just -- we really didn’t see only 1,000 jobs created. but on the flip side, the lack of job growth means for the markets that alan greenspan won’t be raising rates any time soon so mortgage companies, may be financial companies rallied on the day. homebuilders were up, too, and lower mortgage rates should mean more demand so we saw stocks like countrywide financial, indy indymac, and wells fargo along with washington mutual higher. and pulte ignited a gain in homebuilders. its fourth-quarter orders rising 31% to a record. n.v.r. and lennar upgraded to outperform at csfb so a turnaround from yesterday. and the temporary employment and job search companies, a mixed bag with manpower and robert half dropping on the day. other big market movers today, oil companies such as exxon and chevron dropping for a 40 day in a row on concerns about weak profits from selling gasoline and heating oil. also telecom stocks dropped after s.b.c., at&t and bellsouth downgraded today. and also ford cut its forecasts and that pulled down many of the auto companies. back to you? the studio.
>> deb, thank you very much. moving on, here, now, former enron assistant treasurer lea fastow failed to enter a guilty plea by a noon deadline earlier this week. the judge hearing the case rejected limiting fastow’s present term to five months and reserved the right to alter the jail term. she’s charged with conspiracy to commit wire fraud and money laundering in addition to four false tax return charges. lea fastow’s refusal to plea guilty may scuttle a separate plea bargain by her husband, andrew, enron’s former chief financial officer. andrew fastow was seeking approval from a different judge to plead guilty to hiding billions of dollars in enron debt in off-the-book partnerships. he’s the highest-ranking enron official to be indicted in connection with wrongdoing at the bankrupt energy company which collapsed and left over $60 billion in unpaid debt and some 6,000 employees out of work. oil supplies already at 28-year lows expected to fall further as frigid weather in the u.s. northeast continues. the oil price―the price, rather, of crude oil in new york jumped to a nine-month high, closing up 33 cents or 1% at $34.31 a barrel. demand for heat during the cold is affecting natural gas, as well, which rallied to a 10-month high, ending higher by 2.7% to $7.29 per million b.t.u.’s. gold also recorded its biggest weekly gain since november. it rose .6% to $426.80 an ounce. the dollar’s drop is boosting the metal’s appeal for european investors. our next guest follows southeast regional banks in the u.s. and many are set to report earnings next week. we’ll find out what he’s expecting and what he believes the prospects are for higher rates as well as the potential for merger activity next year.
