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Dow Jones Industrial Average News, 5/6/2016: The health of the U.S. economy is in focus today as the divide between job growth and economic growth has continued in recent months.
Today's jobs report will tell if the nation has been able to keep employment growth going despite a recent GDP report that indicated the economy increased at a tepid 0.5% pace in the first quarter.
Can that continue? Investors will know very soon.
Here's today's top stock market news, stocks to watch, ways to profit and economic calendar for May 6, 2016.
What's Moving the Dow Jones Industrial Average Today: The April Jobs Report
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Dow Jones futures slipped 60 points after the U.S. Labor Department indicated that the economy added just 160,000 jobs last month, short of economist expectations. The official unemployment rate remained at 5% in April.
Here's a breakdown of why the Dow is pushing lower this morning.
- First up, stocks were on pace for their worst week-long streak since February as investors continued to eye earnings reports and economic data. But the big focus today is the reaction to the April employment report, which stated that the U.S. jobless rate remained at 5% last month. Overall, this is a lukewarm report.
- The jobs report puts the U.S. Federal Reserve back in focus, as money markets no longer anticipate that the central bank will increase interest rates two more times in 2016. According to CME FedWatch, the probability of the rate hike doesn't top 50% until December 2016. The probability of a rate hike in June currently sits at 15%.
- WTI crude oil prices slipped 1.5% this morning as traders took gains off the table following the recent gains fueled by supply disruptions. Meanwhile, Brent crude gained 3.4%. Traders are still dissecting the health of the energy markets after new fighting in Libya threatens the African nation's already struggling output.
- Meanwhile, a massive wildfire caused $1 billion in damage in the oil-rich Canadian province of Alberta and shuttered oil sands production. Economists are now concerned that the disruption could significantly weigh on Canada's second-quarter GDP figure.
Now here's your list of top stocks to watch in today's market, plus today's economic calendar:
Companies to Watch in the Stock Market Today
- Shares of GoPro Inc. (Nasdaq: GPRO) slumped another 8% as the firm's epic slide continues. The company beat Wall Street top-line earnings expectations but announced that it will delay the release of its drone until the holiday season. During a call, the GoPro CEO Nick Woodman also discussed that the firm saw revenue decline by 50% during the previous quarter. That was still better than Wall Street had anticipated.
- The woes for Jack Dorsey just keep coming. The technology CEO saw shares of his payment company Square Inc. (NYSE: SQ) fall 23% in pre-market hours after the company reported a huge quarterly loss. The firm reported a loss of $0.23 per share, much higher than the expected loss of $0.06. The firm narrowly topped revenue expectations, but operating expenses surged last quarter. Like Square, shares of Dorsey-run Twitter Inc. (NYSE: TWTR) have also struggled to find a bottom as the social media giant struggles to generate advertising revenue.
- The robots are coming! General Motors Co. (NYSE: GM) and ride-sharing company Lyft Inc. announced plans to test a fleet of new self-driving electric vehicles next year. The deal comes just months after GM announced a $500 million investment in Lyft. The firms plan to rely on the technology obtained when GM spent $1 billion to purchase autonomous-driving technology firm Cruise Automation Inc.
- Next, shares of News Corp. (Nasdaq: NWSA) fell early this morning after the firm reported its fifth-straight quarterly decline in revenue. News Corp., which owns The Wall Street Journal and HarperCollins, cited declines in print advertising sales and fluctuations in the U.S. dollar for the 7.3% decline in revenue.
- Shares of insurance giant Cigna Corp. (NYSE: CI) beat Wall Street earnings expectations by $0.17 per share but saw revenue figures slide below analyst expectations. The firm also boosted its full-year earnings expectations as it anticipates a steep boost in growth in the healthcare sector.
- Shares of Walgreens Boots Alliance Inc. (Nasdaq: WBA) fell 2.5% early this morning after the drugstore company announced plans to sell 15 million shares through a secondary offering.
- On the earnings front, look for additional reports from Cognizant Technology Solutions Corp. (Nasdaq: CTSH), Gogo Inc. (Nasdaq: GOGO), PDC Energy Inc. (Nasdaq: PDCE), Exelon Corp. (NYSE: EXC), and Madison Square Garden Co. (NYSE: MSG).
Today's U.S. Economic Calendar (all times EDT)
- Employment Situation at 8:30 a.m.
- Baker Hughes Rig Count at 1 p.m.
- Consumer Credit at 3 p.m.
- Treasury STRIPS at 3 p.m.
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About the Author
Garrett Baldwin is a globally recognized research economist, financial writer, and consultant with degrees from Northwestern, Johns Hopkins, Purdue, and Indiana University. He is a seasoned financial and political risk analyst, with a focus on stocks, hedge funds, private equity, blockchain, and housing policy. He has conducted risk assessment projects for clients in 27 countries, and consulted on policy and financial operations for some of the nation's largest financial institutions, including a $1.5 trillion credit fund, a $43 billion credit and auto loan giant, as well as two of the largest Wall Street banks by assets under management.
Garrett joined Money Map Press as an economist and researcher in 2011, specializing in alternative strategies with an emphasis on fundamental and technical analysis.