Stock Market Watch

Wall Street on Track for Fantastic Week on Employment Data

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Wall Street is now heading for the best week since early 2009, based on jobs data released today. Investors pushed U.S. stocks higher on news the U.S. unemployment rate fell to a 2-1/2 year low. However, they booked profits against technical resistance and before key events in Europe next week, putting a lid on gains.
Recent U.S. economic data has somewhat reassured investors. U.S. companies stepped up hiring and the jobless rate dropped to 8.6 percent from 9 percent, further evidence that the recovery was indeed gaining momentum.
The S&P 500 came within striking distance of its 200-day moving average, an important technical level, and briefly turned positive for the year before retracting back to a 0.88 percent decline.
Financial shares were the biggest benefactors on the day with the S&P financial index up 2.3 percent. JPMorgan Chase (NYSE:JPM) rose 8 percent to $32.90.
Traders are also looking ahead to next week’s European Central Bank meeting and a European Union summit, expected to illuminate plans to combat the escalating borrowing costs in euro zone countries and tackle the debt crisis. There is a rising expectation that this meeting will produce the beginning of a resolution that will allow greater fiscal unity among these nations and the groundwork for a resolution to the euro zone debt crisis.  However, given the track of events in recent weeks, traders are nonetheless cautious since expectations have been overly ambitious before.
The Dow Jones industrial average gained 30.61 points, or 0.25 percent, to 12,050.64. The Standard & Poor’s 500 rose 4.18 points, or 0.34 percent, to 1,248.76. The Nasdaq Composite added 8.39 points, or 0.32 percent, to 2,634.59.
The three major indexes were on track to post their largest weekly percentage advance since March 2009. Indexes had advanced more than 1 percent earlier in the day.

Research In Motion warned Friday it would fall short of its financial targets after taking a huge charge to write down the value of its PlayBook tablet, and the BlackBerry maker’s shares tumbled.  U.S.-listed shares of Research in Motion Ltd (NASDAQ:RIMM) lost 8.8 percent to $16.95 after the BlackBerry maker said it will record a pretax charge to write down the value of its poorly received PlayBook tablet computer.  The stock hit a seven-year low of $15.98 last month.

About a year ago, co-CEO Jim Balsillie said pent-up interest in the PlayBook was “really overwhelming.” Companies are looking for an equivalent of the iPad of corporate use, he said. Later in the spring, Balsillie said “The launch of the PlayBook may well be the most significant development for RIM since the launch of the of the first BlackBerry device back in 1999.” But when the tablet went on sale in April, reviewers puzzled over the lack of email software, saying the device seemed half-baked. RIM now promises updated software in February.
RIM said it expects earnings at the “low to mid point” of the $1.20 to $1.40 per share it previously forecast. Analysts polled by FactSet have on average been expecting $1.18 per share. The company expects revenue slightly the below the $5.3 billion to $5.6 billion in its previous forecast. Analysts had been expecting $5.27 billion, on average.
The PlayBook charge comes as analysts have started to conclude that RIM’s management has no chance of really righting the ship. They’ve started to value the company not on its future prospects, but on how much it would be worth if acquired, broken up, or simply run down while keeping BlackBerry service going.
The company is also taking a charge of $50 million for an embarrassing October outage of email and Web services that lasted days for millions of overseas BlackBerry users. It briefly spread to the U.S. and Canada before the company was able to contain the damage.


Google Inc rose 1.4 percent to $622.04 after the Wall Street Journal reported the Internet group was considering a service to help consumers shop online with one-day delivery service to cut the loss of Web traffic to Amazon.com Inc .

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Post Written By: Meggan


Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing.

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