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Pre-Market Primer: US Job Market Shows Signs of Trouble, Major Companies Falter


A mixed bag of earnings and disappointing employment data sends stocks south.

MINYANVILLE ORIGINAL Equities are set to decline today after two straight days of gains as the markets digest disappointing labor market data and mixed earnings results.

Initial claims for unemployment insurance last week fell to 388,000. Economists expected claims to decline to 375,000 from the prior week's upwardly revised level of 389,000. Continuing claims rose to 3.32 million. At 10:00 a.m. EDT, the government will report on pending home sales, which are expected to show a monthly rise of 1%.

Stock futures are pointing to a lower opening today. Dow (^DJI) futures declined by 0.22% to 13,011.00. S&P 500 (SPY) futures fell 0.32% to 1,382.70. Futures on the Nasdaq (^IXIC) dropped 0.26% to 2,698.50.

Economic sentiment in the eurozone got worse in April. The economic sentiment index fell from 94.5 in March to 92.8. German inflation slowed to 2% year-over-year in April, down from 2.1% in March. Italy's borrowing costs at an auction of six-month debt rose to 1.77% from 1.12% last month. Deutsche Bank (DB) and Banco Santander (STD) both declined in the pre-market after posting disappointing earnings.

Today, 63 companies listed on the S&P 500 have reported earnings. United Parcel Service (UPS), the largest delivery company, Dow Chemical (DOW), the largest chemical company, and Exxon Mobil (XOM), the largest oil company, all missed estimates. UPS, an economic bellwether, fell 2.26% in the pre-market after it delivered earnings of $1 per share, one cent short of expectations.

PepsiCo (PEP) beat estimates with $0.69 per share, helped by strong sales in Latin America. PepsiCo CEO Indra Nooyi is laying off thousands of workers to turn the faltering snack and beverage company around. Altria Group (MO), the parent company of the nation's biggest cigarette maker, Philip Morris, cut costs in the March quarter, helping it offset declines in sales and grow profit by almost 4%, meeting analyst expectations.

Chrysler Group (FIATY) reported that earnings quadrupled in the first quarter over the year-earlier period. Chrysler, currently owned by Italy's Fiat, posted its first annual profit since 2005 last year. The first three months of this year were the best that Chrysler has had since its bankruptcy and government rescue.

Twitter: @vincent_trivett
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