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New York Markets Open in:

Futures: /quotes/zigman/43106711/delayed S&P 500 -1.9% /quotes/zigman/48241424/delayed DOW -2.0% /quotes/zigman/43108768/delayed NASDAQ -2.3%

need to know
FTSE 100 hits lowest level since 2012
Sweden cuts k ey rate further below zero
Société Générale profit up on Amundi stake sale
Crude price pushes below $27 a barrel
Shell cancels $14.4 billion bridge credit facility
Zurich posts bigger-than-expected loss
Akzo Nobel in talks to buy BASF coatings unit
Chinese group bids $1.2 bln for Opera Software
U.S. government runs $55 billion budget surplus

Twitter proves Wall Street critics were right
Twitter adds new timeline feature

Hong Kong stocks dive 3.9% as selloff kicks off

Bass issues warning on China’s foreign cash reserves
What’s holding back the world economy?
China's FX reserves drop $99.47 bln


North Korea reportedly executes top general

Yellen: Fed isn’t sure negative rates are legal
Yellen doesn’t expect to reverse Fed rate hike
Yellen gets into heated exchange at hearing
Bond market, Yellen face off on negative rates

Burger King to start selling hot dogs

Wendy's profit, revenue top estimates
McDonald’s breakfast boost may not last


BP CEO calls for cuts to carbon emissions
Supreme Court blocks Obama’s carbon cuts

Will falling oil prices bankrupt Saudis, Russians?
Cheap oil may make OPEC dominant again
As oil revenue drops, Gulf states ponder taxes
Will oil get so cheap, it won’t pay to extract it?

Christie, Fiorina drop out of presidential race

A break for zombie-fighting Amazon developers

Expedia doesn’t see Airbnb as a threat

Private-equity firms now buying back their own shares

Has college financial aid totally backfired?

Michael Moore: Imagine life without student debt
6 ways Obama would make college affordable

What Apple, Amazon and Starbucks have in common
Amazon up after new share buyback plan

Portland Trail Blazers guards Damian Lillard and C.J. McCollum live with ... mom
Meet the NBA stars who live with their mothers

Musician Lenny Kravitz owned the 19th-century Creole cottage in the French Quarter of New Orleans from 1994 to 2012. It's now back on the market at $1.16 million.

RE/Max N.O. Properties/Mansion Global
A bona fide celebrity abode — believe it or not
London house of the week has spiritual side
S.F. real estate looked like this in 2000, too
Location Scouts: Insider intel from top markets

REIT bonus targets at heart of Brixmor scandal

Why is everyone freaking out about ‘CoCos’?

If you’re bullish on oil, Chevron and Exxon are buys here
If you’re bullish on oil, these stocks are buys

Social Security in the crosshairs: replacement rates again
Stage is being set for cuts to Social Security

Is it wise to hold on to cash reserves?

/conga/frontpage.html 367666

Markets »

122.29MDow Volume:
Avg Vol: 131.80M
Unchanged
201
Decliners
3048
Advancers
3255
Price Chg %Chg 1 Day
Range: 1 Day
  • 1 Day
  • 5 Days
  • 1 Month
  • 3 Months
  • 6 Months
  • 1 Year
  • 2 Years
Dow
/quotes/zigman/627449/realtime 15,915 -100 0.62%
Nasdaq
/quotes/zigman/12633936/realtime 4,284 +15 0.35%
S&P 500
/quotes/zigman/3870025/realtime 1,852 0 0.02%
GlobalDow
/quotes/zigman/629063/realtime 2,061 -19 0.89%
Gold
/quotes/zigman/33772884/delayed 1,218 +23 1.92%
Oil
/quotes/zigman/2260836/delayed 26.58 -0.87 3.17%
FTSE 100
/quotes/zigman/3173262/delayed 5,505 -167 2.94%
DAX
/quotes/zigman/2380246/delayed 8,701 -316 3.51%
CAC 40
/quotes/zigman/3173214/delayed 3,896 -165 4.06%
FTSE MIB
/quotes/zigman/1482176/delayed 15,846 -868 5.20%
IBEX 35
/quotes/zigman/2759620/delayed 7,799 -344 4.23%
Stoxx 600
/quotes/zigman/2380150/delayed 303 -12 3.93%
Asia Dow
/quotes/zigman/6959860/realtime 2,441 -13 0.53%
Nikkei 225
/quotes/zigman/5986735/delayed 15,713 -372 2.31%
Hang Seng
/quotes/zigman/2622475/delayed 18,546 -742 3.85%
Shanghai
/quotes/zigman/1859015/delayed 2,763 -18 0.63%
Sensex
/quotes/zigman/1652085/delayed 23,050 -709 2.98%
Singapore
/quotes/zigman/1709939/delayed 2,538 -44 1.70%
Euro
/quotes/zigman/16008136/realtime/sampled 1.13 +0.00 0.27%
Yen
/quotes/zigman/16008150/realtime/sampled 111.33 -2.02 1.79%
Pound
/quotes/zigman/16008140/realtime/sampled 1.45 -0.01 0.49%
Australia$
/quotes/zigman/16008115/realtime/sampled 0.70 -0.01 0.94%
DXY Index
/quotes/zigman/1652083/delayed 95.49 -0.34 0.35%
WSJ $ Idx
/quotes/zigman/41508961/realtime 88.69 -0.19 0.21%
U.S. 10yr
/quotes/zigman/15866666/realtime 1.62 -0.05 3.14%
German 10y
/quotes/zigman/15866409/realtime 0.17 -0.08 31.85%
Italy 10yr
/quotes/zigman/15866497/realtime 1.67 +0.02 1.35%
Spain 10yr
/quotes/zigman/15866444/realtime 1.74 +0.02 1.16%
U.K. 10yr
/quotes/zigman/15866328/realtime 1.32 -0.10 7.10%
Japan 10yr
/quotes/zigman/15866525/realtime 0.01 0.00 0.00%
Crude Oil
/quotes/zigman/2260836/delayed 27 -1 3.17%
Gold
/quotes/zigman/33772884/delayed 1,218 +23 1.92%
Corn
/quotes/zigman/25518691/delayed 360 0 0.07%
DJIA F
/quotes/zigman/48241424/delayed 15,553 -313 1.97%
S&P F
/quotes/zigman/43106711/delayed 1,811 -36 1.94%
Silver
/quotes/zigman/32655632/delayed 15 +0 1.36%

Quotes

Symbol Price Change % Change
FB /quotes/zigman/9962609/composite 101.00 1.46 1.47%
AAPL /quotes/zigman/68270/composite 94.27 -0.72 -0.76%
GOOG /quotes/zigman/59527964/composite 684.12 6.01 0.89%
BAC /quotes/zigman/190927/composite 11.98 -0.22 -1.80%
C /quotes/zigman/5065548/composite 37.41 -0.10 -0.27%
F /quotes/zigman/264304/composite 11.34 -0.01 -0.09%
T /quotes/zigman/398198/composite 36.43 -0.22 -0.60%
BP /quotes/zigman/247026/composite 28.04 -0.31 -1.09%
GE /quotes/zigman/227468/composite 28.30 0.02 0.07%
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Rates »

5 yr CD
1.3%
2 yr CD
0.7%
1 yr CD
0.5%
MMA $10K+
0.2%
MMA $50K+
0.4%

National averages from Bankrate.com

You Don’t Need Another Credit Card, You Need A Better One.
Avg. APR Last Week 6 Months
Low Interest 11.96% 11.96% 11.62%
Business 13.12% 13.12% 12.85%
Student 13.42% 13.42% 13.14%
Balance Transfer 14.35% 14.35% 14.12%
Airline 15.17% 15.17% 15.10%
Cash Back 15.20% 15.26% 15.27%
Reward 15.25% 15.28% 15.14%
Instant Approval 18.02% 18.21% 18.00%
Bad Credit 22.56% 22.88% 22.73%
Source:CreditCards.com

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Job Growth May Be Bad for Stock Returns

America’s employers added 243,000 jobs in January, reducing the headline unemployment rate to 8.3%. That rate is too high for comfort, but it’s the lowest it has been in nearly three years.

That ought to be good for stocks. After all, workers are also customers. Jobs bring pay, which fuels spending and drives corporate revenues higher.

But in the short term, more hiring might cause stocks to stall rather than soar, says Jeff Kleintop, chief market strategist at LPL Financial, an investment services firm.

That’s because the sharp run-up in stock prices since the recession ended in mid-2009 has been driven by a similarly sharp run-up in corporate profits. For the S&P 500 index, trailing operating earnings nearly doubled between the fourth quarter of 2008 and the fourth quarter of 2011. And the index price has slightly more than doubled since hitting its March 2009 low.

The profits came from cutting back rather than expanding. As companies cut jobs in 2008 and 2009, the result was a surge in what economists call worker productivity, and what employees call splitting more work among fewer people.

Labor accounts for around 70% of the costs of a typical large company outside of the energy and mining sectors. So by skimping on hiring, companies have allowed more of their revenues to fall to the bottom line as profits.

“Everything has been to the benefit of corporations,” says Mr. Kleintop. “But now the balance is shifting.”

Growth in labor productivity slowed from 4.1% in 2010 to 0.7% last year.  Fewer companies are beating Wall Street’s earnings forecasts than usual, and more are cutting their earnings guidance.

For the S&P 500, earnings are projected to increase 9% this year, down from 15% last year and 47% in 2010. The index has already surged 8% for the year, leaving little room for it to increase in tandem with coming earnings.

Barring some unseen source of faster earnings growth, one of two things should happen next. Either the market becomes more expensive relative to earnings or it pauses until earnings catch up.The S&P 500 is already trading at 14 times trailing earnings, which is close to its historic average.

The good news is that with productivity gains slowing, earnings growth may have to come from hiring rather than at the expense of it. In the long run that should create more prosperity and higher stock prices.  For now, Mr. Kleintop recommends avoiding sectors of the market where prices look stretched and earnings growth is minimal, like utilities and telecoms, and favoring sectors where prices are reasonable and earnings growth remains robust, like manufacturing and technology (see Tech Stocks: Safer Than You Think).

Investors can get exposure to those using the Industrial Select Sector SPDR (XLI) and the Vanguard Information Technology ETF (VGT).

Comments

We welcome thoughtful comments from readers. Please comply with our guidelines. Our blogs do not require the use of your real name.

Comments (5 of 5)

View all Comments »
    • If logic ruled the world of stocks than hiring more would not be good because it would lower productivity? Than your supposition is that employers don’t know how well they’re doing. If they’re over hiring than they’re not doing well. It’s ludicrous to attempt to equate these numbers. What is underlying is the fact that improvements in the employment numbers EVENTUALLY will lead to increases in interest rates. So for those who absolutely are sure that Ron Paul is right that we need to close the FRB than you should also note that it is the Fed which has stoked the market from March ’09 to now.

    • The deficit of 1.5 trillion is funding 50 to 60 million jobs in America. We are borrowing to spend on consumer economy. These are all service sector jobs. Google for “DEFLATIONARY CRASH” to understand why these jobs cannot be sustained.

      http://www.kondratieffwavecycle.com/

      We need manufacturing jobs, science, engineering and technology jobs. Service sector jobs are not able to help curb trade deficit. It is a dead end. Keynesians are dead wrong about it. At the end of the day, they won’t be able to spend to stimulate the economy. Once their hand is forced, the crash will be unlike anything we have ever witnessed. We need to let the free markets run so that private sector can align itself with what works and what does not. FED is giving the wrong signals to the economy and it is creating wrong kind of jobs. These jobs won’t survive the next leg down.

    • Seriously?

      Year over year improvement in corporate profits are up less than 8% for the most recent data. The last quarter’s improvement is the lowest of the last 8 quarters. The earnings of the last quarter are not the highest in the last four quarters. They are third highest of four quarters.

      And 1 in 3 companies are earning less than they did one year ago.

      The profit boom is over.

      The logic displayed here is flawed. Jobs follow solid year over year profit growth by 4-5 quarters.

      Without profit growth there is no reason to add staff or shifts.

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MarketWatch - Stock Market Quotes, Business News, Financial News
Bulletin
Investor Alert

New York Markets Open in:

Futures: /quotes/zigman/43106711/delayed S&P 500 -1.9% /quotes/zigman/48241424/delayed DOW -2.0% /quotes/zigman/43108768/delayed NASDAQ -2.3%

need to know
FTSE 100 hits lowest level since 2012
Sweden cuts k ey rate further below zero
Société Générale profit up on Amundi stake sale
Crude price pushes below $27 a barrel
Shell cancels $14.4 billion bridge credit facility
Zurich posts bigger-than-expected loss
Akzo Nobel in talks to buy BASF coatings unit
Chinese group bids $1.2 bln for Opera Software
U.S. government runs $55 billion budget surplus

Twitter proves Wall Street critics were right
Twitter adds new timeline feature

Hong Kong stocks dive 3.9% as selloff kicks off

Bass issues warning on China’s foreign cash reserves
What’s holding back the world economy?
China's FX reserves drop $99.47 bln


North Korea reportedly executes top general

Yellen: Fed isn’t sure negative rates are legal
Yellen doesn’t expect to reverse Fed rate hike
Yellen gets into heated exchange at hearing
Bond market, Yellen face off on negative rates

Burger King to start selling hot dogs

Wendy's profit, revenue top estimates
McDonald’s breakfast boost may not last


BP CEO calls for cuts to carbon emissions
Supreme Court blocks Obama’s carbon cuts

Will falling oil prices bankrupt Saudis, Russians?
Cheap oil may make OPEC dominant again
As oil revenue drops, Gulf states ponder taxes
Will oil get so cheap, it won’t pay to extract it?

Christie, Fiorina drop out of presidential race

A break for zombie-fighting Amazon developers

Expedia doesn’t see Airbnb as a threat

Private-equity firms now buying back their own shares

Has college financial aid totally backfired?

Michael Moore: Imagine life without student debt
6 ways Obama would make college affordable

What Apple, Amazon and Starbucks have in common
Amazon up after new share buyback plan

Portland Trail Blazers guards Damian Lillard and C.J. McCollum live with ... mom
Meet the NBA stars who live with their mothers

Musician Lenny Kravitz owned the 19th-century Creole cottage in the French Quarter of New Orleans from 1994 to 2012. It's now back on the market at $1.16 million.

RE/Max N.O. Properties/Mansion Global
A bona fide celebrity abode — believe it or not
London house of the week has spiritual side
S.F. real estate looked like this in 2000, too
Location Scouts: Insider intel from top markets

REIT bonus targets at heart of Brixmor scandal

Why is everyone freaking out about ‘CoCos’?

If you’re bullish on oil, Chevron and Exxon are buys here
If you’re bullish on oil, these stocks are buys

Social Security in the crosshairs: replacement rates again
Stage is being set for cuts to Social Security

Is it wise to hold on to cash reserves?

/conga/frontpage.html 367666

Markets »

122.29MDow Volume:
Avg Vol: 131.80M
Unchanged
201
Decliners
3048
Advancers
3255
Price Chg %Chg 1 Day
Range: 1 Day
  • 1 Day
  • 5 Days
  • 1 Month
  • 3 Months
  • 6 Months
  • 1 Year
  • 2 Years
Dow
/quotes/zigman/627449/realtime 15,915 -100 0.62%
Nasdaq
/quotes/zigman/12633936/realtime 4,284 +15 0.35%
S&P 500
/quotes/zigman/3870025/realtime 1,852 0 0.02%
GlobalDow
/quotes/zigman/629063/realtime 2,062 -18 0.88%
Gold
/quotes/zigman/33772884/delayed 1,218 +23 1.92%
Oil
/quotes/zigman/2260836/delayed 26.57 -0.88 3.21%
FTSE 100
/quotes/zigman/3173262/delayed 5,506 -166 2.93%
DAX
/quotes/zigman/2380246/delayed 8,701 -316 3.51%
CAC 40
/quotes/zigman/3173214/delayed 3,914 -147 3.63%
FTSE MIB
/quotes/zigman/1482176/delayed 15,846 -869 5.20%
IBEX 35
/quotes/zigman/2759620/delayed 7,800 -343 4.22%
Stoxx 600
/quotes/zigman/2380150/delayed 303 -12 3.95%
Asia Dow
/quotes/zigman/6959860/realtime 2,441 -13 0.54%
Nikkei 225
/quotes/zigman/5986735/delayed 15,713 -372 2.31%
Hang Seng
/quotes/zigman/2622475/delayed 18,546 -742 3.85%
Shanghai
/quotes/zigman/1859015/delayed 2,763 -18 0.63%
Sensex
/quotes/zigman/1652085/delayed 23,041 -718 3.02%
Singapore
/quotes/zigman/1709939/delayed 2,538 -44 1.70%
Euro
/quotes/zigman/16008136/realtime/sampled 1.13 +0.00 0.27%
Yen
/quotes/zigman/16008150/realtime/sampled 111.33 -2.02 1.78%
Pound
/quotes/zigman/16008140/realtime/sampled 1.44 -0.01 0.51%
Australia$
/quotes/zigman/16008115/realtime/sampled 0.70 -0.01 0.93%
DXY Index
/quotes/zigman/1652083/delayed 95.49 -0.34 0.35%
WSJ $ Idx
/quotes/zigman/41508961/realtime 88.69 -0.19 0.21%
U.S. 10yr
/quotes/zigman/15866666/realtime 1.62 -0.05 3.14%
German 10y
/quotes/zigman/15866409/realtime 0.17 -0.08 31.57%
Italy 10yr
/quotes/zigman/15866497/realtime 1.67 +0.02 1.39%
Spain 10yr
/quotes/zigman/15866444/realtime 1.74 +0.02 1.20%
U.K. 10yr
/quotes/zigman/15866328/realtime 1.32 -0.10 7.10%
Japan 10yr
/quotes/zigman/15866525/realtime 0.01 0.00 0.00%
Crude Oil
/quotes/zigman/2260836/delayed 27 -1 3.21%
Gold
/quotes/zigman/33772884/delayed 1,218 +23 1.92%
Corn
/quotes/zigman/25518691/delayed 360 0 0.07%
DJIA F
/quotes/zigman/48241424/delayed 15,556 -310 1.95%
S&P F
/quotes/zigman/43106711/delayed 1,811 -36 1.94%
Silver
/quotes/zigman/32655632/delayed 15 +0 1.36%

Quotes

Symbol Price Change % Change
FB /quotes/zigman/9962609/composite 101.00 1.46 1.47%
AAPL /quotes/zigman/68270/composite 94.27 -0.72 -0.76%
GOOG /quotes/zigman/59527964/composite 684.12 6.01 0.89%
BAC /quotes/zigman/190927/composite 11.98 -0.22 -1.80%
C /quotes/zigman/5065548/composite 37.41 -0.10 -0.27%
F /quotes/zigman/264304/composite 11.34 -0.01 -0.09%
T /quotes/zigman/398198/composite 36.43 -0.22 -0.60%
BP /quotes/zigman/247026/composite 28.04 -0.31 -1.09%
GE /quotes/zigman/227468/composite 28.30 0.02 0.07%
Visit the quote page and your most recently viewed stocks will automatically be displayed here.
Please log in to view your watchlist
MarketWatch Portfolio

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Rates »

5 yr CD
1.3%
2 yr CD
0.7%
1 yr CD
0.5%
MMA $10K+
0.2%
MMA $50K+
0.4%

National averages from Bankrate.com

You Don’t Need Another Credit Card, You Need A Better One.
Avg. APR Last Week 6 Months
Low Interest 11.96% 11.96% 11.62%
Business 13.12% 13.12% 12.85%
Student 13.42% 13.42% 13.14%
Balance Transfer 14.35% 14.35% 14.12%
Airline 15.17% 15.17% 15.10%
Cash Back 15.20% 15.26% 15.27%
Reward 15.25% 15.28% 15.14%
Instant Approval 18.02% 18.21% 18.00%
Bad Credit 22.56% 22.88% 22.73%
Source:CreditCards.com

SPONSORED SECTIONS

Trending Tickers
  • /quotes/zigman/118681/composite TSLA-3.09%
  • /quotes/zigman/41663/composite GLD+0.77%
  • /quotes/zigman/22489978/composite RLYP-3.48%
  • /quotes/zigman/714403/composite SPY-0.09%
  • /quotes/zigman/162154/composite NOK-1.02%
X
Powered by StockTwits
Link to MarketWatch's Slice.

As of July 2, 2013, the SmartMoney content you loved now lives on MarketWatch.

MarketWatch will continue to provide the same important news and information you rely on every day. And, as a MarketWatch user, you will be able to enjoy:

  • Personalized news and quote email alerts
  • Editorial e-newsletters about personal finance, mutual funds and market-specific coverage
  • Premium newsletters by our market experts
  • Games, such as Virtual Stock Exchange and Beat the Darts
  • Free WSJ.com registration