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Jobs report leaves investors flat

Posted at 9:16 AM, May 04, 2012
and last updated 2012-05-04 09:19:03-04

CNNMoney staff

NEW YORK (CNNMoney) – Dow Jones industrial average, Nasdaq and S&P 500 futures, which were little changed ahead of the 8:30 a.m. ET jobs report, and they didn’t move much immediately after the report that showed employers adding far fewer jobs than expected in April. Stock futures indicate the possible direction of the markets when they open at 9:30 a.m. ET.

The jobs report showed a net gain of 115,000 jobs, far less than the 160,000 forecast by economists surveyed by CNNMoney. However, upward revisions to the February and March jobs figures and a drop in the unemployment rate to 8.1% may temper some of investors’ disappointment in the report.

While the monthly jobs number always tends to have a big impact on markets, the readings for April and May will be especially important in determining whether the Federal Reserve moves toward another round of quantitative easing or stays put. The hope that the Fed might pump more money into the economy to respond to weakening hiring could also help to support stocks Friday.

This week had already brought conflicting data on the labor market, with payroll processor ADP reporting that private-sector job growth has slowed, but the Labor Department announced that initial jobless claims declined.

U.S. stocks slipped Thursday, as the encouraging initial claims report competed with a weaker-than-expected reading on the U.S. service sector.

Economy: Economists surveyed by CNNMoney expect the Labor Department’s data to show 160,000 jobs added in April. While that’s an improvement from March’s weak growth, the pace is still slow compared to job gains in December, January and February — each of which exceeded 200,000.

The unemployment rate is forecast to remain at 8.2%.

Companies: Facebook set a price range Thursday of $28 to $35 per share for its initial public offering. The company also upped the maximum size of its offering to $13.6 billion, up from its previous $5 billion estimate.

First Solar shares slipped 0.8% in after-hours trading Thursday, after the renewable energy firm reported a steep quarterly loss related to restructuring and announced a new CEO.

AIG shares fell 1.4% in after-hours trading Thursday, despite earnings that came in well ahead of analyst expectations.

Chesapeake Energy shares dropped slightly after the company confirmed that it’s facing an inquiry from the Securities and Exchange Commission in the wake of revelations about CEO Aubrey McClendon’s controversial compensation program.

LinkedIn shares jumped 9% in after-hours trading, after the social media company reported strong earnings and revenue that doubled versus last year.

World markets: European markets were lower in midday trading. Britain’s FTSE 100 lost 0.6%, whiel France’s CAC 40 slipped 0.3%, while DAX in Germany slid 0.5%.

Asian markets ended mixed. The Shanghai Composite edged up 0.5%, while the Hang Seng in Hong Kong fell about 1.1%. Tokyo was closed for a holiday.

Currencies and commodities: The dollar was slightly stronger against the euro, the British pound and the Japanese yen.

Oil for June delivery fell $2.09 to $100.45 a barrel.

Gold futures for June delivery tumbled $4.40 to $1,630.40 an ounce.

Bonds: The price on the benchmark 10-year U.S. Treasury were lower following the jobs report, lifting the yield to 1.94% from 1.92% late Thursday.

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