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The “recovery” story continues to get pumped full of holes. On Friday, the Labor Department reported another month of weak job growth. In June, the U.S. economy added just 80,000 jobs, well below estimates of 100,000 and slightly better than May’s revised higher 77,000 figure. After the report, equities across the board sold-off.
The latest unemployment report capped the worst three-month period for employment growth in two years. For the second-quarter, the U.S. economy gained 225,000 jobs, averaging only 75,000 per month. In comparison, the first-quarter averaged 226,000 jobs each month.
Although the headline unemployment rate was unchanged at 8.2 percent, the U-6 rate, also known as the underemployment rate, edged 0.1 percent higher to 14.9 percent. The U-6 rate includes everyone in the headline rate, plus people who are either employed part-time but prefer a full-time position, or want work but have stopped looking. “The economic recovery is clearly stuck in quicksand as job creation remains anemic and layoff announcements soar,” said Todd Schoenberger, managing principal at The BlackBay group, according to CNBC. “It’s going to be an extremely difficult second half of 2012 for Americans, as employment worries rise and the household balance sheet continues to deteriorate.”
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In morning trading, the Dow Jones Industrial Average and the S&P 500 both declined more than 1 percent and erased all gains made previously in the week. The S&P 500 has now declined more than 1 percent for four consecutive months on the day of the unemployment report. However, there are a few recognizable names that are holding their ground in today’s pullback.
Discount retailers are still a trendy choice among investors. Shares of Wal-Mart Stores Inc. (NYSE:WMT) traded up 3 cents, while Family Dollar Stores Inc. (NYSE:FDO) jumped more than 1.5 percent. Both names are up about 20 percent year-to-date. Target Corp. (NYSE:TGT) shares also edged 1.7 percent higher today. Staying with the frugality theme, McDonald’s Corp. (NYSE:MCD) was the only company in the Dow to trade higher ahead of lunch hour.
Cheap entertainment was also on the list of gainers today, as Netflix Inc. (NASDAQ:NFLX) shares popped almost 2 percent. CEO Reed Hastings recently announced on his Facebook (NASDAQ:FB) that the company’s monthly viewing exceeded 1 billion hours for the first time ever during June. Netflix shares have gained nearly 20 percent year-to-date, but it is still unknown how profitable the company was in pursuit of those 1 billion hours. Facebook shares also edged slightly higher.
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