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Pre-Market Primer: Jobless Claims, Layoffs Decline; Stocks Poised to Recover


Amazon's Kindle chief says that publishers forced a contract change after Apple's deal.

Stocks are poised to recover from yesterday's declines after two data points suggested that the labor market is not as dire as yesterday's ADP report portrayed.

Initial jobless claims fell by 11,000 last week to 346,000, matching forecasts. The outplacement firm Challenger, Gray & Christmas reported that announcements of corporate layoffs fell to 36,398 from 38,121 in April.

After a disappointing ADP private sector employment report sent the Dow (INDEXDJX:.DJI) down over 200 points, futures are up 0.39% at 15,017 this morning before the opening bell. S&P 500 (INDEXSP:.INX) futures rose 0.53% to 1,616.60 and future contracts on the Nasdaq (INDEXNASDAQ:.IXIC) index climbed 0.37% to 2,949.50.

European stocks are slightly higher despite a technical glitch that caused a delayed opening. German factory orders fell much harder than forecast, sinking 2.3% in April. Economists expected a 1% drop. Greek unemployment hit a fresh record of 26.8% in March.

As expected, the European Central Bank left rates unchanged at 0.5%. The Bank of England also kept its main lending rates and asset purchases unchanged.

The Nikkei (INDEXNIKKEI:.NI225) sank 0.8%, bringing the Japanese index into technical bear territory. It is now 19% below its 52-week high just weeks ago.

Amazon (NASDAQ:AMZN) VP of Kindle content Rusell Gradinetti testified in the antitrust case against Apple (NASDAQ:AAPL). Apple pushed the publishers (who already settled with the Justice Department) to move to an industry-wide agency model where the publishes set the price, he says. The day after the iPad was introduced, publishers demanded to change their contract from the wholesale to agency model that would give Apple "most favored nation" status. Amazon essentially got the same deal from the publishers, resulting in price-matching. "It was our belief," he said, "that the reason we were in this situation was that some of the publishers wanted to slow the sale of the Kindle."

PepsiCo (NYSE:PEP) CEO Indra Nooyi denied that the company is in negotiations to purchase SodaStream (NASDAQ:SODA). Reuters reported that Pepsi was willing to pay as much as $95 per share, or a 37% premium over yesterday's close for the company whose main product carbonates tap water and whose revenue doubled in 2012. Shares of SodaStream are up 7% before the bell.

Verizon (NYSE:VZ) could also see heavy trading today after the Guardian reported that the National Security Administration is pulling location and call data for millions of US customers.

For the first time since 1997, US domestic oil production topped imports last week. The Energy Information Administration said that output will reach a 28-year high of 8.6 billion barrels per day by late 2014.

Twitter: @vincent_trivett
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