Wall Street Overview
Stock prices fell on Friday, December 7, after rising initially after a slowdown in employment growth in the US in November and a half-century low unemployment rate, even if there were signs that the world's largest economy slows down.
The Labor Department said on Friday that the nonfarm payroll had risen by 155,000 last month, compared to 250,000 in October. Economists had predicted an increase of 195,000 jobs. The unemployment rate was unchanged at 3.7%, the lowest in 49 years. Average hourly wages rose 6 cents to $ 27.35, up 3.1% last year.
Recent concerns over the health of the economy have been pondering from Wall Street to the Federal Reserve to the White House. The S & P 500 fell more than 6% last month, at least partially due to concerns about slowing growth.
While the Fed has raised US interest rates since 2015 to keep inflation in check, some economists say the central bank is likely to suspend its campaign early next year, fearing that the strength of the economy will be weighed down by higher borrowing costs decreases for businesses and consumers.
"Employment data was slightly weaker than expected, which eased some investor concerns about the future of interest rates," said Chris Gaffney, president of TIAA Bank's global markets. "A rate hike in December is still set in stone, but the somewhat weaker employment numbers will contribute to calls for a Federal Reserve break in the first half of 2019."
The Dow Jones Industrial Average fell 305 points or 1.23% to 24,641, the S & P 500 fell 1.05% and the Nasdaq fell 1.49%.
Share prices on Thursday saw sharp losses mixed after the arrest of a senior Chinese executive in Canada who threatened to resolve the truce between Washington and Beijing. The Dow fell 79 points or 0.32% to close at 24,948 on Thursday. The S & P 500 fell 0.15% and the Nasdaq gained 0.42%. The Dow and the S & P ended the day with a light annual profit.
Global oil prices rose on Friday on reports that Iran had worked with its rival Saudi Arabia on OPEC production cuts, paving the way for a broader agreement with Russia to reduce overall supply next year. Brent crude oil futures contracts for February delivery, the global benchmark, rose 5.6% to trade at $ 63.45 a barrel, while West Texas Intermediate crude oil contracts for January are more associated with US gas prices , rose 4.9% to $ 54.03 a barrel.
Broadcom Inc. (AVGO) rose 1.4% on Friday after the chipmaker posted earnings in the fourth quarter that exceeded estimates and delivered a forecast that exceeded analyst expectations.
Broadcom posted adjusted earnings of $ 5.85 per share and revenues of $ 5.44 billion. Analysts expected a profit of $ 5.58 with a turnover of 5.4 billion US dollars. The company increased its quarterly dividend by 51 cents to $ 2.65 per share and increased its share repurchase authorization by $ 6 billion.
The company expects to generate $ 24.5 billion in revenue in fiscal year 2019, exceeding its estimated $ 22.58 billion. Broadcom expected its operating margin to be 51% in 2019, slightly above the 50% of fiscal 2018.
HCL Technologies Ltd. Accepted a Portfolio of Software Products from International Business Machines Corp. (IBM) to acquire $ 1.78 billion. IBM dropped by 3.1%.
Cronos Group Inc. (CRON) rose 23.2% after the Canadian cannabis company confirmed that Altria Group Inc. (MO), manufacturer of Marlboro cigarettes, was investing USD 1.8 billion (2 , 4 billion CAD) against a shareholding of 45%.
Lululemon Athletica Inc. (LULU) fell 7.1% on Friday, even after the yoga apparel maker's adjusted profits and sales in the third quarter outperformed Wall Street forecasts.
The company expects to generate revenue of $ 1.12 billion to $ 1.13 billion in the fourth quarter.