Stock Market Today: Jobs Are Good, But this Stock is Better
By , Money Morning•
The stock market today opened higher after the unemployment rate unexpectedly dropped. The Dow Jones was up 60 points, or 0.45%, and the S&P 500 was up 6.40 points, or 0.44% in early trading.
The jobs report seems to have jumpstarted markets today, but one stock has been hot all week and doesn't need manipulated reports to boost it higher.
Here's a breakdown of today's news and a stock you need to know about.
Unemployment falls for right reasons this month- The Labor Department reported today that 114,000 jobs were added in September, in line with expectations. The surprising news is that unemployment declined three percentage points to 7.8%, marking the first time since January 2009, President Obama's first month in office, that unemployment is below 8%. Unlike last month where the rate ticked down due to more workers dropping out of the labor force, this month's decline was a result of more jobs added in prior months and a surge in part-time workers. The August and July reports were collectively revised upward a total of 86,000 jobs and around 582,000 workers accepted a part-time role. After the revisions 146,000 jobs were added on average over the last three months, significantly better than the second quarter average of 67,000. Both candidates will try to spin September's report and analyze the numbers to their advantage as October's jobs report comes out just days before the election. "The September jobs report will frame the economic debate and could prove critical to the election outcome," Carl Riccadonna, senior U.S. economist at Deutsche Bank AG (NSYE: DB), told TheWall Street Journal ahead of Friday's release.
Earnings season about to kick off- Believe it or not next week starts the third quarter earnings season as Alcoa Inc. (NSYE: AA) announces its earnings after markets close on Tuesday. Investors have been waiting to see if a poor earnings season could reverse the rally we've had over the past few months. Analysts expect the majority of earnings to be weak after many companies have already lowered their outlooks.
Now here's one stock to avoid and one big winner:
Zynga Inc (Nasdaq: ZNGA) takes a beating- Online game providerZynga plunged this morning after lowering its outlook and receiving several downgrades. The company now expects to report a when it announces its third quarter earnings in three weeks. ZNGA stock has lost over 75% of its value this year and is down more than 17% today in early trading. "I don't think this bodes well for next year because they're going to exit the year with declining revenue and declining EBITDA," Sterne Agee analyst Arvind Bhatia told Reuters. "They've got 3,000 plus people and for the level of revenue they're generating, we should expect massive layoffs at Zynga."
Bonus:This biotech is heating up- There's a biotech stock that's soaring this week thanks to its progress with cancer treatments. But there's actually way more to this story than what's in the headlines. If you are a Private Briefing member you already know the details behind this company - information that has led Wall Street to give this stock a target price 200% higher than where it's trading today. To find out more about this stock's profit potential, click here.