US Stock Market Overview – Stock Fall along with Yields Ahead of Jobs Report

Expectations are for NFP to show an increase of 90K jobs
David Becker

US stocks moved lower on Thursday ahead of Friday’s jobs report. Expectations are for non-farm payrolls to rise by 90K jobs, down nearly 80K due to the strike by GM. Most sectors were lower on Thursday led by a decline in materials and industrials, utilities bucked the trend. Jobless claims edged slightly higher on Thursday. Stocks started the day mixed, with shares of Apple and Facebook rallying following stronger than expected earnings that were released after the closing bell on Wednesday. US yields moved lower as fears of declining growth crept back into the market. The VIX volatility index surged 7.6%, rising from 3-month lows.

Jobless Claims Rise

Ahead of Friday’s jobs report the labor department reported that initial claims increased 5,000 to a 218,000 for the week ended October 26. Data for the prior week was revised to show 1,000 more applications received than previously reported. Expectations had been for claims to rise to 215,000 in the latest week. The four-week moving average of initial claims, slipped 500 to 214,750 last week.

Non-farm payrolls are scheduled to be released on Friday. Economics forecast the strike by GM cut between 75,000 and 80,000 jobs from October payrolls. As a result, the employment report will likely show only 90,000 jobs were added in October, down from 136,000 in September. The unemployment rate is forecast to rise 0.1% point to 3.6%. Even discounting the GM strike, job growth has been slowing.

Altria Cut Juul’s Valuation

Altria Group wrote down its investment in Juul Labs Inc. by more than 33% and now holds it at a price that values the e-cigarette maker at about $24 billion. Altria cited unexpected shifts in Juul’s market, including proposed US bans on e-cigarette flavors and regulatory crackdowns abroad, for its decision to book a write-down of $4.5 billion. Altria also disclosed Thursday that the Federal Trade Commission is investigating the company’s role in the resignation of Juul’s former chief executive officer and his replacement by an Altria executive.

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