Stocks Surge despite Soft Labor Report
Stocks in the US got off to a strong start on Tuesday despite a weaker than expected September jobs report which was shrugged off by investors. The S&P 500 index along with the Russell 2000 hit new all-time highs on Tuesday. Earning continued to impress with Netflix (NASDAQ:NFLX) , DuPont (NYSE:DD) and United Technologies (NYSE:UTX) all beating expectations. Apple (NASDAQ:AAPL) is scheduled to unveil a number of new products on Tuesday which has helped boost the stock price to new multi-month highs.
Prior to the opening bell the BLS released their September employment report that was delay due to the government shutdown. According to the Department of Labor, nonfarm payrolls increased by 148,000 jobs in September compared to estimates of 180,000. The unemployment rate dipped to 7.2% from 7.3% in August. The August payroll number increased from 169,000 to 193,000 but the July number was cut making the gain from both July and August a meager 9K increase. The decline in the unemployment rate did not come from a reduction in the labor participation rate which held steady at 63.2%.
In corporate news, Netflix’s shares jumped 11.75% on the open, but reversed course mid-day after the company’s third quarter earnings topped consensus, with earning per share coming in at $0.52, net profit quadrupling to $32M, and revenue climbing 22% to $1.1B. The video service added 1.29M subscribers in the U.S. to give it 31.09M customers vs. the 30M that was expected and 28.7M at rival HBO, although the latter is way more profitable. Netflix believes it will add another 6M U.S. streaming customers in 2014 on top of the 6M it expects to see this year.
Amid increasing competition from lower-cost rivals and falling market share in the tablet market, Apple today unveiled a thinner and lighter version of its standard 9.7-inch iPad, which uses thin film instead of glass. Apple introduced an update to the iPad mini that will incorporate a “retina” high-density display similar to the one used in the regular iPad.
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