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Dow, S&P 500 Set Closing Highs After Weak Jobs Data

Dan Berman
Hot Stock Minute

Stocks closed Friday slightly positive, which was enough to set new record closing highs for the Dow and S&P 500, following a disappointing jobs report. The Labor Department reported 162,000 new jobs added during July. Expectations had been for a gain of 180,000 to 185,000 new jobs and the whisper numbers were closer to 200,000. The unemployment rate did surprise by dropping 0.2% to 7.4%, but that was due in part to a falling participation rate. Meanwhile, the Commerce Department says June factory orders rose 1.5% after an upwardly revised 3% in May. Consumer spending was also up in June, increasing 0.5%. The number was lifted by car sales and higher gas prices.

Viacom (VIA) rose 6% on the heels of its earnings report. Excluding items, the company posted profits of $1.29 a share. That missed estimates by a penny but was a 20% increase over the same period last year. In addition, revenue exceeded expectations at $3.69-billion verses estimates of $3.57-billion. Viacom's pay TV channels generate the bulk of its revenue, but that is starting to shift towards the licensing of content to streaming services like the one run by Amazon.

Cablevision (CVC) climbed 5% on its earnings. Analysts expected a profit of just 4-cents a share, but the company came in with 51-cents. Revenue was a slight miss at $1.57-billion when expectations were for $1.58-billion. Cablevision says it lost 20,000 TV customers for the quarter, which was more than quadruple the number expected. So what's behind the rally? At least one analyst says Cablevision is a takeover target for one of its four larger rivals in the cable business.

Dow component Chevron (CVX) fell over 1% on a disappointing quarterly report. The company made $2.77 a share versus estimates of $2.96. Revenue was higher than expected at $57.37-billion when consensus had been for $56.01-billion, but higher costs and softening demand for both crude oil and refined products ultimately impacted net income. Profits were in fact down 26% from a year ago.

LinkedIn (LNKD) climbed more than 10% on its quarterly earnings, which came out after yesterday's closing bell. The company earned 38-cents a share compared to estimates of 31-cents. Revenue was also 10-million above expectations at $364-million. Traders seem to be ignoring the fact that LinkedIn gave guidance for the current quarter and the full year which disappointed analysts. Even before today's jump, LinkedIn shares have been up 89% year-to-date.

Yelp (YELP) climbed another 10% today following gains yesterday of 23%. The first rise came on Yelp's earnings. Today's ascent could be a reaction to remarks from CNBC's Jim Cramer. He's calling Yelp the next "master of mobile." Indeed the company says more than 40% of its local ad revenue came form mobile during the last quarter. That's a number similar to Facebook's.

Weight Watchers (WTW) is looking alarmingly thinner. The stock dropped 19% on earnings reported after the bell yesterday. They actually beat expectations on both the top and bottom lines. But moving forward, the company lowered its full-year outlook and announced the resignation of CEO David Kirchhoff.