Markets Lower, Closing News 11/4/11

Markets closed down, after a mixed payroll report sent futures and the markets wavering. Greek Prime Minister Papandreou’s fate rests in the hands of a confidence vote by the Greek parliament expected tonight while the G20 refuse further monetary support to the troubled European nations.

Greek Finance Minister Evangelos Venizelos confirmed today that the referendum, that could have resulted in Greece’s exit from the euro, will not take place. The referendum, called by Papandreou on Monday sent the government reeling and put into question his position as prime minister. The opposing party is still calling for Papandreou’s resignation as he asks for support from his own party to strengthen his position and move forward...basically leaving the situation in question. Meanwhile Italian Prime Minister Silvio Berlusconi welcomed quarterly monitoring by the IMF and the EU on its pension reform, labor markets and privatization. During its summit today, the G20 refused to provide additional support for the European countries to overcome their debt issues, encouraging them to work out their own issues.

In October payrolls numbers disappointed; nonfarm employment rose 80,000 vs. expectations of +95,000 and private sector jobs increased 104,000 vs. expectations of +125,000. However, revisions from the prior month popped 158k (vs. +103k) for nonfarm payrolls and +191k (vs. +137k) for the private sector. The unemployment rate ticked down slightly to 9.0% from 9.1%.

Reports state that M.I.A. Chairman and CEO of MF Global, John Corzine, officially stepped down as the company’s top executive amid rumors that millions of dollars of customer money has gone missing.  Corzine hired a prominent white-collar defense lawyer and remains in the dark.

Market Indices/Statistics:

  • Dow closed down 61.23 pts/-0.51% to 11,983.24
  • S&P closed down 7.92 pts/-0.63% to 1,253.23
  • Nasdaq closed down 11.82 pts/-0.44% to 2,686.15
  • 25 of the 30 Dow stocks closed lower
  • All 10 S&P 500 sectors closed down
  • Materials and Energy were the least negative sectors (-0.13% and -0.14%); Financials was the worst performing sector (-1.4%)
  • The VIX was down 0.34 to 30.16
  • Oil is up $0.41 to $94.48
  • Nat Gas is up $0.001 to $3.902
  • Gold is down $8.60 to $1,756.50
  • Euro vs. Dollar down $0.0022 to $1.3789
  • Dollar vs. Yen up $0.300 to $76.97

Companies in the News:

Jefferies Group Inc. shares rallied midday after spending most of the day in negative territory.  JEF closed up 0.5%/$0.06 to $12.07. Concern over Jefferies exposure to the European debt woes pressured the stock yesterday. The company issued a release today detailing the actual impact on the company which eased investors’ concerns.

LinkedIn Corporation reported Q3 earnings last night and announced that the company would be issuing $100mil. additional shares. Shares traded down 5% last night due to a loss in the quarter but more because of the dilution from the offering. LNKD slid further this morning down more than 8% and closed down 5.9%/$5.13 to $82.37.

Groupon Inc. priced at $20 (up from a $16-18 range) and opened at $28.00 on 2.95 mil. shares. GRPN is trading up 31.4%/$6.27 at $26.11

McGraw-Hill and CME Group announced a joint venture that will create new products in the growing index business. The combination will be known as the S&P/Dow Jones Indices with an annual revenue of more than $400 million and benchmarked assets of about $6 trillion. The new agreement expands the products covered to include swaps and extends CME Group's existing exclusive rights to the E-mini and other S&P indexed futures.

Private equity firm and second largest  Yahoo! Inc. shareholder, Third Point LLC, sent a letter to the company’s board requesting two board seats, demanding the resignation of co-founder and executive director Jerry Yang from the board. Third Point also expressed its concerns that the company is considering ownership deals with private equity firms. YHOO shares closed down 1.36%/$0.21 to $15.24.

Earnings:

Starbucks Corp shares closed up 6.9%/$2.86 on stronger than expected earnings results.

AIG shares closed down 2.9%/$0.72 after reporting a greater than expected Q3 net loss of $4.1B from $2.52B a year earlier, hampered somewhat by an impairment charge in its aircraft leasing business.

CBS Corporation ended up 2.7%/$0.66 on a strong Q3 profit rising 6.6% prompted by online streaming media deals and higher fees from distributors carrying its network. The company also announced a $1.5 billion repurchase program.

Coming Monday:

Economic Reports: Consumer Credit