Markets Rocket Higher on Unemployment Data: Weekly Market Recap

Here’s your Cheat Sheet to this week’s top stories:

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Monday

Stocks advanced on Monday. The Federal Reserve Bank of Dallas reported that its production index, a key measure of state manufacturing conditions and in used to gain insight into broader economic conditions, fell from 9.9 to -0.5 in April, indicating that output did not change much on the month. Notably, expectations for future business activity declined to its first negative reading in five months.

DJIA: +0.72% to 14,818.80 S&P 500: +0.72% to 1,593.61 NASDAQ: +0.85% to 3,307.02
Gold: +$19.10 to $1,472.70 per ounce Oil: +$1.36 to $94.36 per barrel U.S. 10-Year: +0.003 points to 1.668%

Higher Incomes Are Helping Out the American Consumer: The Commerce Department said Monday that consumers spending increased 0.2 percent in March, following a 0.7 percent jump in February and 0.3 percent gain in January. Analysts had expected just a 0.1 percent rise. Personal income increased 0.2 percent last month, a slightly softer result than forecast. In February, the measure rose 1.1 percent… (Read more.)

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Should Central Banks Buy Stocks? Central banks such as the Federal Reserve and the Bank of Japan have been trying to create a wealth effect by injecting record amounts of liquidity into the financial system. By punishing savers through low interest rates, they hope to force more people into riskier assets such as stocks that offer a higher rate of return. As asset prices rise, the belief is that consumer spending and confidence will follow. However, loose monetary policies also appear to be affecting central banks… (Read more.)

European Economic Sentiment Slides As Recovery Stalls: Data released on Monday add to a growing body of evidence that suggest that the euro zone may be further from a recovery than some had expected. The Economic Sentiment Indicator, compiled by the European Commission, decreased by 1.5 points in the EA17, and decreased by 1.8 points in the EU27, trending well below the long-term average… (Read more.)

Herbalife (NYSE:HLF) closed the day up 1.25 percent but edged fractionally lower in post-market trading. The nutritional-supply company posted net income of $1.10 per share on revenue of $1.1 billion, just ahead of expectations. The company also raised its 2013 earnings forecast from a range of $4.45 to $4.65 to a range of $4.60 to $4.80 per share.

Deutsche Bank (NYSE:DB) closed the day up 3.74 percent. The bank posted first-quarter 2013 net income of 1.71 euros per share ($2.24) on net revenues of 9.4 billion euros ($12.3 billion). Analysts were looking for earnings of just 1.32 euros per share on revenue of 9.07 billion euros.

Sina Corp. (NASDAQ:SINA) closed the day up 9.4 percent. The Chinese media company announced that it has reached an agreement with Alibaba Group. Alibaba will invest $586 million in the company in exchange for an 18 percent stake.

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Tenet Healthcare (NYSE:THC) ended the day up 6.51 percent. Robert W. Baird upgraded its rating on the stock from Neutral to Outperform and increased its price target from $44 to $51.

JPMorgan (NYSE:JPM) announced on Sunday that Frank Bisignano, co-Chief Operating Officer, is leaving the company effective immediately in order to assume the role of Chief Executive Officer at First Data Corp., a payment-processing company. Matt Zames, the other co-COO, will become sole COO effective immediately.

Bayer AG (BAYZF.PK) announced on Monday morning that it has signed a merger agreement with Conceptus (NASDAQ:CPTS), a California-based healthcare company most known for Essure, a permanent birth-control system. The transaction values Conceptus at about $1.1 billion, or $31.00 per share, a 20 percent premium on Friday’s closing price. The deal is still subject to anti-trust approval in the U.S.

Don’t Miss: Identity Theft Victim: Walmart Doesn’t Care.

Tuesday

Markets closed up on Tuesday.

DJIA: +0.14% to 14,839.80 S&P 500: +0.25% to 1,597.57 NASDAQ: +0.66% to 3,328.79
Gold: +$4.70 to $1,472.10 per ounce Oil: -$1.51 to $92.99 per barrel U.S. 10-Year: +0.002 points to 1.673%

Employment Costs: Good for Employers, Bad for Workers: The Employment Cost Index is a closely watched gauge as it indicates whether or not the job market will contribute to inflation. As the Labor Department reported Tuesday, employment expenses grew in a slow pace in the first quarter, a sign that the purchasing power of the American consumer remained strong during the three-month-period… (Read more.)

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U.S. Housing Market: Still in Recovery Mode? “Despite some recent mixed economic reports for March, housing continues to be one of the brighter spots in the economy,” David M. Blitzer, Chairman of the Index Committee at S&P Dow Jones Indices, noted in a press release announcing the gains made by the housing market last month. Standard & Poor’s/Case-Shiller Home Price Indices, a leading measure of U.S. home prices, showed average home prices increased 8.6 percent and 9.3 percent for the 10- and 20-City Composites, respectively, in the 12 months ending in February 2013… (Read more.)

Is the Retail Sector Making Up Lost Ground? March brought a disappointing reading of the strength of the retail sector, and following several weeks of declines recorded by both the International Council of Shopping Centers and Goldman Sachs Retail Chain Store Sales Index and Redbook’s weekly measure of retail sales, concerns for the health of the American consumer began to grow among economists. But this week, both gauges took back some lost territory… (Read more.)

Here’s your Cheat Sheet to today’s top stock stories:

Apple (NASDAQ:AAPL) closed the day up nearly 3 percent after news circulated that the company will be issuing $17 billion in corporate bonds.

Aetna (NYSE:AET) closed the day up 2.3 percent after reporting financial results. Revenue increased 3.7 percent to $9.5 billion, missing estimates for $9.6 billion. Adjusted earnings increased 12 percent to $1.50, beating estimates for $1.39… (Read more.)

Best Buy (NYSE:BBY) closed the day up 7.4 percent. The electronics retailer announced that it has agreed to sell 50 percent of its interest in Best Buy Europe, a joint venture it started with Carphone Warehouse Group in 2008. Best buy comments that “the sale price of 500 million pounds (approximately $775 million as of April 29, 2013) is comprised of 420 million pounds in cash and 80 million pounds in CPW stock subject to a 12-month lock-up restriction.”

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Pfizer (NYSE:PFE) fell as much as 3.5 percent in pre-market trading on Tuesday after the biopharmaceutical company released first-quarter financial results that fell short of analyst expectations. Reported revenues decreased 9 percent on the year to $13.5 billion, missing estimates of $14.0 billion. Adjusted earnings fell 5 percent to $0.54 per share, missing estimates of $0.56… (Read more.)

Nuance Communications (NASDAQ:NUAN) closed the day down 18.3 percent after reporting financial results that fell short of analyst expectations. Revenue rose 24 percent on the year to $484 million, but missed expectations for $516.5 million. Adjusted earnings decreased 21 percent to $0.34 per share, and missed expectations for $0.40 per share… (Read more.)

UBS AG (NYSE:UBS) closed the day up 6 percent after reporting first-quarter operating results. The bank reported pre-tax adjusted group profit of 1.9 billion CHF ($2.03 billion). Adjusted group revenues climbed 1.4 billion CHF ($1.5 billion) to 8.0 billion CHF ($8.55 billion), driven by higher client activity. Costs fell 1.7 billion CHF ($1.82 billion) to 6.1 billion CHF ($6.52 billion) on lower litigation and regulatory charges… (Read more.)

Don’t Miss: U.S. Housing Market: Still in Recovery Mode?

Wednesday

All three major U.S. indices closed in the red Wednesday. Stocks fell across the board, dragging the standard & Poor’s 500 Index from a record, thanks to concerning economic reports, including the slow growth in American payrolls evidenced by ADP’s employment report.

At the close:

DJIA: -0.94% to 14,701.00 S&P 500:-0.93% to 1,582.70 NASDAQ:-0.89% to 3,299.13
Gold: -$14.90 to $1,457.20 per ounce Oil: -2.70% to $90.94 per barrel U.S. 10-Year: –0.043 points to 1.630%

Signing the Patient Protection and Affordable Care Act into law in March of 2010 has become one of the most controversial acts in Barack Obama’s presidency: the legislation has been challenged in the U.S. Supreme Court; recent polls have shown that close to half of all Americans are unsure whether Obamacare is still law; and political opposition has described its implementation as slow and messy. In fact, in a press conference Tuesday, a reporter asked President Obama to explain some of the Democratic opposition that has surfaced recently… (Read more.)

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Gains recorded by the Labor Department’s weekly report on initial claims for unemployment benefits had begun to paint a rosy picture of increasing strength in the labor market at the beginning of the year. Then came March’s Employment Situation report — compiled by the Bureau of Labor Statistics — that showed the United States economy created a disappointing 88,000 jobs in March, a sharp decline from the 268,000 jobs added to payrolls in February. Those figures were a new low for the recovery, and the month’s participation rate was even at its lowest since 1979. The picture of April’s labor market gains is similarly grim. Payroll processor ADP, along with Moody’s Analytics, announced Wednesday that businesses added 119,000 jobs to their payrolls from March to April — a figure below analysts’ expectations for 150,000 new job… (Read more.)

“The PMI survey suggests that the economy is showing signs of yet another ‘spring swoon’ as it moves into the second quarter, linked to a softening of demand in the home market,” commented Chris Williamson, chief economist at Markit, in the firm’s April U.S. manufacturing PMI report. Markit’s PMI index fell from 54.6 to 52.1, indicating expansion but at a slower rate than before. The new orders index declined from 55.4 to 51.5, also expanding but at a much slower rate than before. In turn, the backlogs of work index fell from 50.2 to 49.9, contracting for the month. (Read more.)

Facebook’s (NASDAQ:FB) reported results on Wednesday that suggested that the company’s mobile efforts were finally beginning to show evidence of success. The social network said it generated first-quarter revenue of $1.46 billion, exceeding the $1.44 billion anticipated by analysts., with net income coming in at $219 million. In total, approximately 30 percent of the company’s total advertising revenue came from mobile devices, a significant increase from the 23 percent recorded in the last quarter.

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Ford (NYSE:F) has not had an easy time reviving its luxury brand, but the automaker’s efforts to breathe new life into the Lincoln have begun to produce strong sales, at least in April. While the brand has lost significant market share since its peak in 1990, with the MKZ, a new midsize sedan, Ford is slowly becoming more competitive. Last month, Ford sold approximately 4,000 of the vehicles, more than in the last three months combined, according to a press release issued Wednesday. This growth contributed to a substantial increase in new vehicle sales as well. Overall, Lincoln sales rose 21 percent from the previous month…

For Merck (NYSE:MRK) investors, a point for serious examination is whether the pharmaceutical manufacturer’s first-quarter results showed any sign that its empty pipeline and patent expiration problems were ending. Most giant pharmaceutical manufacturers have experienced great growth on the stock charts recently, with shares doubling the returns of the broader market over the past six months. But Merck has been noticeably left behind by that trend.

Is Apple (NASDAQ:AAPL) prepping the European market for a revolutionary new product? Apple recently filed a patent application in Europe that covers “bulk-solidifying amorphous alloys, or bulk metallic glasses” that are related to proprietary technologies it acquired in 2010 from the California-based Liquidmetal Technologies company. Back in 2010, Apple filed papers with the Securities and Exchange Commission that showed it had signed a “Master Transaction Agreement” with Liquidmetal Technologies. According to this document, Apple gained access to all of Liquidmetal’s “intellectual property assets.”

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It has finally happened. MetroPCS (NYSE:PCS) and Deutsche Telekom’s T-Mobile USA (NYSE:TMUS) have merged, giving birth to the “TMUS” ticker on the New York Stock Exchange.The deal took a long time to finally go through. T-Mobile had been working for a while to find a merger of some sort, having tried to form a partnership with AT&T (NYSE:T) in the past but getting stopped by regulators. It also took some effort on the part of Deutsche Telekom to get MetroPCS to agree to the deal.

Maybe it’s good shows or maybe it’s good movies, but either way, Time Warner (NYSE:TWX) has managed to pull in enough for a year-on-year boost in earnings. Time Warner consists of 3 big elements: the television networks division, the studios unit, and the publishing unit. While the first 2 of those units were quite successful in the first quarter, the publishing unit struggled to bring in enough for Time Warner to feel it was worthwhile to hang onto. For the quarter, the major media conglomerate earned an adjusted net income of $785 million. This was a 19 percent increase year-over-year.

Don’t Miss: Underwhelming Economic Reports Pull Markets Lower.

Thursday

Strong earnings mixed with positive economic indicators to bright Mr. Market’s day on Thursday.

DJIA: +0.89% to 14,831.60 S&P 500: +0.94% to 1,597.59 NASDAQ: +1.26% to 3,340.62
Gold: +$21.40 to $1,467.60 per ounce Oil: +$3.01 to $94.04 per barrel U.S. 10-Year: -0.004 points to 1.626%

Ongoing Economic Downturn Forces the ECB’s Hand: As expected, the European Central Bank announced on Thursday that it will lower the interest rateon both the marginal lending facility and main refinancing operations within the Eurosystem. Effective May 8, the rate on the marginal lending facility will be decreased by 50 basis points to 1.0 percent, and the rate on main refinancing operations will be decreased by 25 basis points to 0.50 percent. The interest rate on the deposit facility will remain unchanged at 0.0 percent… (Read more.)

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Are Employers Shaking Off Tough Economic Headwinds? Amidst increasing concerns that tough fiscal headwinds are slowing job growth, the Labor Department said Thursday that initial claims for unemployment benefits fell to 324,000 last week — the lowest level reported in the past five years. While payroll processor ADP’s National Employment Report showed Wednesday that employers added a disappointing number of new jobs to their payrolls in April, last week’s claims data signaled fewer workers were laid off… (Read more.)

Weak Imports and Soft Demand Narrows U.S. Trade Gap: The U.S. Census Bureau and the U.S. Bureau of Economic Analysis, through the Department of Commerce, reported that the U.S. trade deficit shrank 11 percent sequentially in March to $38.8 billion. Total exports were $184.3 billion, down 0.9 percent on the month, while total imports were $223.1 billion, down 2.8 percent. Economists were expecting the deficit to shrink marginally to $42.4 billion… (Read more.)

General Motors (NYSE:GM) stock closed the day up 3.25 percent after posting relatively strong first quarter results. Revenue declined 2.27 percent on the year to $36.9 billion, but beat the average estimate of $36.6 billion. Earnings fell 27.96 percent on the year to $0.67 per share, beating the mean estimate of $0.54 per share… (Read more.)

MetLife (NYSE:MET) closed the day up 4.09 percent after reporting solid earnings. Revenue climbed 6.81 percent on the year to $17 billion, missing the average estimate of $17.32 billion. Adjusted earnings climbed 8.03 percent to $1.48 per share, beating the average estimate of $1.30 per share… (Read more.)

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Yelp (NYSE:YELP) closed the day up 27.35 percent after reporting its earnings. Revenue increased 68.42 percent to $46.13 million, beating the average estimate of $44.57 million. Adjusted earnings climbed from -$0.31 per share to -$0.08 per share, missing the average estimate of -$0.06 per share… (Read more.)

Visa (NYSE:V) closed the day up 5.65 percent after reporting strong results after the bell on Wednesday. Revenue rose 14.74 percent on the year to $2.96 billion, beating the average estimate of $2.85 billion. Adjusted earnings increased 20 percent to $1.92 per share, beating the average estimate of $1.81 per share… (Read more.)

Facebook (NASDAQ:FB) climbed as much as 1.7 percent in pre-market trading. The world’s largest social network released first-quarter results after the bell on Wednesday that elicited mixed reactions from investors, but showed overall growth and stability in the company’s core advertising business. Revenue of $1.45 billion edged out the average analyst estimates of $1.44 billion, while non-GAAP earnings of $0.12 per share missed estimates by $0.01. Mobile advertising revenue climbed from 23 percent of total ad revenue in the fourth quarter to 30 percent in the first quarter… (Read more.)

Intel (NASDAQ:INTC) announced today that the board of directors has unanimously elected Brian Krzanich as its next chief executive officer, succeeding Paul Otellini. Krzanich will assume his new role at the company’s annual stockholders’ meeting on May 16.

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Friday

The markets rallied on Friday, spurred by improvements in labor-market conditions and a generally positive earnings season. The Dow Jones Industrial Average broke 15,000 for the first time. At the close:

DJIA: +0.96% to 14,974.00 S&P 500: +1.05% to 1,614.42 NASDAQ: +1.14% to 3,378.63
Gold: -$3.40 to $1,464.20 per ounce Oil: +$1.47 to $95.46 per barrel U.S. 10-Year: +0.113 to 1.739%

Unemployment’s Down, But Is It Enough? On Friday, the Labor Department’s Bureau of Labor Statistics released its monthly Employment Situation report showing that the United States economy had created 165,000 jobs in April, slightly lowering the unemployment rate from 7.6 percent to 7.5 percent — a four-year low. Last month’s job growth also represented a significant improvement from March’s anemic payroll gain of an upwardly revised 138,000… (Read more.)

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Are Falling Factory Orders a Bad Economic Omen? Orders placed with U.S. factories fell more than forecast in March as the slumping economy weakened demand for metals, mining equipment, and military goods. March’s 4 percent drop in bookings was the largest decrease since August, according to the Commerce Department. As economists forewarned earlier in the year, the biggest restraint on growth has been the massive, across-the-board government spending cuts implemented in March after Congress failed to reach a fiscal deal and January’s hike in payroll taxes… (Read more.)

Economic Headaches: What’s Behind the Second-Quarter Slowdown? The Institute for Supply Management reported on Friday that economic activity in the non-manufacturing sector grew for the 40th consecutive month in April. The NMI registered 53.1 percent, a 1.3 percentage point decline from March but still above the dividing line between growth and contraction, drawn at 50 percent… (Read more.)

CBOE Holdings (NASDAQ:CBOE) closed the day up 3.31 percent after reporting strong first-quarter financial results. Revenue increased 17.55 percent on the year to $142.7 million, beating the average estimate of $139.3 million. Adjusted earnings increased 35.14 percent to $0.50 per share, beating the average estimate of $0.47 per share… (Read more.)

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Kraft Foods Group (NASDAQ:KRFT) closed the day up 5.11 percent following the company’s earnings announcement after the bell on Thursday. Revenue rose 2 percent to $4.55 billion, beating the average estimate of $4.49 billion. Adjusted earnings of $0.76 per share beat the average estimate of $0.64 per share.

Staples (NASDAQ:SPLS) closed the day up 2.89 percent after it announced that it became the first major U.S. retailer to sell 3D printers. The company is now selling the Cube 3D Printer from 3D Systems (NYSE:DDD), which closed the day up 0.96 percent.

LinkedIn (NYSE:LNKD) closed the day down 12.93 percent . The world’s largest professional social network posted relatively strong first-quarter results, but provided underwhelming guidance. Net income surged 210 percent to $52.4 million. On a per share basis, the company earned 45 cents per share, beating expectations for 30 cents by a wide margin. Revenue jumped 72 percent to $324.7 million, also beating Wall Street’s consensus estimate for $324.7 million. Linked in guided second-quarter revenues in a range between $342 and $347 million, below expectations for $358 million… (Read more.)

AIG (NYSE:AIG) closed the day up 5.67 percent. The insurer, now a favorite among hedge funds after nearly collapsing during the financial crisis, reported first-quarter financial results that were generally satisfying. Insurance operating income climbed 28 percent on the year to $3.0 billion. Overall profit fell 35 percent to $1.98 billion, or $1.34 per share, which beat estimates for $0.87 per share.

Don’t Miss: Unemployment’s Down, But Is It Enough?