The Day Ahead: Focus on Jobs Report

 | Dec 02, 2011 | 8:24 AM EST  | Comments
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In the Headlines

Wall Street is awaiting this morning's jobs report from the Labor Department with futures indicating a higher open Friday.

Remarks from the German chancellor, calling for changes in the eurozone accord, helped send European stocks higher. Her statements followed yesterday's comments from European Central Bank president Mario Draghi, who indicated that the ECB may step up its support of the region's economy.

Major European indices were trading to the upside early Friday. The euro was showing gains vs. the dollar.

Asian stocks closed mostly higher, although Shanghai ended with a 1.09% decline, which analysts attributed to worry over recent data showing weakness in the nation's manufacturing.

Economic Docket

In the U.S., the big focus premarket was the nonfarm payrolls report, which is due out at 8:30 am EST. Economists expect a gain of 125,000 in November, better than 80,000 in October. The unemployment rate is expected to remain unchanged at 9%.

However, after ADP's report earlier in the week showed 206,000 new private sector jobs, some traders may be expecting a higher "whisper number" when it comes to jobs added last month.

Commodities Corner

In commodities news ahead of the bell, crude oil advanced $1.01 per barrel to $101.21. Gold, meanwhile, rose $17 per ounce to $1,756.80. The precious metal is showing a gain so far this week.

Earnings News

S&P 500 component Big Lots (BIG) reported third-quarter earnings per share of $0.06, excluding items, on sales of $1.14 billion. Wall Street had expected income of $0.09 per share on revenue of $1.13 billion.

The close-out retailer also raised its full-year earnings outlook. Big Lots shares fell $0.03, a fractional decline, to $39.70 ahead of the open.

Early Movers

Premarket gainers included Lululemon Athletica (LULU), rebounding after Thursday's gap lower on slowing sales growth. Janney Montgomery Scott upgraded the stock to Buy from Neutral, citing valuation and growth potential. Lululemon shares rose $0.73, 1.55%, to $47.90 in early trade.

Also climbing ahead of the bell was Tiffany (TIF), which skidded earlier in the week on weak outlook. Shares jumped $1.65, or 2.49%, to $68 early Friday. Heading into today's session, shares were trading below key moving averages.

Western Digital (WDC) bolted $2.75, or 9.4%, to $32. The disk-drive maker raised its quarterly sales outlook and said it had partially resumed production in Thailand following floods.

Research In Motion (RIMM) slumped $0.83, or 4.47%, to $17.75 in premarket trade. The company will take a $485 million charge on high inventories of its BlackBerry PlayBook tablet, which turned out to be a dud. RIM also said it would not meet fiscal-year guidance.

Fiber-optic gear maker Finisar (FNSR) gained $0.31, or 1.92%, to $16.43 ahead of the bell. The early move was a rebound after Thursday's 12.6% decline in heavy volume. The company's decline followed a weak third-quarter outlook. Finisar shares are down nearly 46% year-to-date.

Analyst Actions

Analyst moves early Friday included a Goldman Sachs upgrade of home-improvement retailer Lowe's(LOW). Goldman boosted the stock to Buy from Neutral, citing technology, marketing and improved store presentation. It also raised its price target on Lowe's to $28 from $26. Lowe's advanced $0.43, or 1.93%, to $24.33 in the premarket.

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