Stocks Slide on Weak Jobs Report
4:15 PM ET 6/3/11 | Briefing.com
Stocks finished in the red again today after this morning's employment report
came in below what were already low expectations. The S&P 500 finished -1.0%,
just off its lows, while the Nasdaq Composite finished -1.5%. Today's losses
were sparked by the morning employment data, which showed that Nonfarm payrolls
for May climbed by 54,000, which is less than the 169,000 additions that had
been expected, while the unemployment rate ticked up to 9.1%. Although the data
was still disappointing, it may have been somewhat priced in after Wednesday's
weaker-than-expected ADP employment report, which was followed by a 2.3%
selloff
in the market. While today's employment data was weak, the ISM
Non-manufacturing
Survey of 54.6 surpassed the 53.3 Briefing.com consensus, in contrast to
Wednesday's disappointing ISM Survey. Today's weakness adds to losses earlier
in
the week, and leaves the S&P 500 down 2.2% on the week, with disappointing
economic data being the driving factor. Today, energy stocks outperformed with
the S&P 500 Energy Index finishing the day flat and representing by far the
best
performing sector. Baker Hughes (BHI 74.58, +0.98) was among the best
performers
in the S&P 500 1.3% gain while other oil & gas equipment service names such as
Schlumberger (SLB 85.04, +0.75), and Halliburton (HAL 50.28, +0.13) also fared
quite well. Tech stocks were the worst performers of the S&P 500 components,
trading down 1.5% as a group. Consumer Discretionary, Materials and Industrials
all lost 1.3%. Shares of Orexigen Therapeutics (OREX 2.12, -1.06) are a
standout
on the downside, losing 33% after a Food and Drug Administration division
advised the company that its proposed cardiovascular outcomes trial would not
adequately address the approval deficiency for its Contrave weight-loss drug
candidate. Instead, the division requested a pre-approval cardiovascular
outcomes trial that Orexigen believes would generate significantly more
information than is feasible. In response, the company has put on hold any
further clinical development for its obesity programs in the U.S. and will
accelerate the exploration of opportunities outside of the country. Vivus (VVUS
8.25, -0.29) and Arena Pharmaceuticals (ARNA 1.38, -0.03) are the two other
companies competing for approval of their obesity drug candidates. The
benchmark
10-yr yield slipped below 2.95% earlier this morning, but rose back up to
2.997%
and traded near there most of the day.
