U.S. Markets open in 1 hr 56 mins

Small business confidence perks up; jobs market solid

People wait in line to enter the Nassau County Mega Job Fair at Nassau Veterans Memorial Coliseum in Uniondale, New York October 7, 2014. REUTERS/Shannon Stapleton

By Lucia Mutikani

WASHINGTON (Reuters) - U.S. small business owners gained confidence in April and were surprisingly bullish about capital expenditure plans, further supporting views that economic growth was rebounding after a dismal first quarter.

The National Federation of Independent Business said on Tuesday its Small Business Optimism Index rose 1.7 points to 96.9 last month. It was the largest gain since December.

"A fairly positive tone. The data add to the evidence that the weakening in growth in first quarter was largely due to 'transitory' factors," said Jim O'Sullivan, chief U.S. economist at High Frequency Economics in Valhalla, New York.

Small businesses historically have accounted for half of private gross domestic product. The economy is clawing back after being slammed by a mix of bad weather, disruptions at ports, a strong dollar and deep spending cuts by energy firms.

Data on employment and consumer sentiment have suggested a pick-up in growth momentum at the start of the second quarter, but the dollar and lower oil prices continue to weigh on manufacturing.

Nine of the NFIB index's 10 components rose last month, with the exception of sales. The NFIB said despite the turmoil in the energy sector, "the shale states exhibited stronger capital spending and hiring than the rest."

Overall business investment has sagged, with energy companies slashing capital expenditure budgets and laying off thousands of workers as lower energy prices undermine exploration and drilling activity.

The NFIB survey of 1,500 firms found that 60 percent, a post-recession high, reported capital outlays, up two points. Of those making expenditures, 44 percent said they had bought new equipment, up four points. About 26 percent of owners planned capital outlays in the next 3 to 6 months, up 2 points.


FRONT-LOADED CUTS

This bolsters views the bulk of the energy spending cuts were front loaded into the first quarter and hopes that capital spending outside the energy sector will spring back.

The government reported last month that mining exploration, shafts and wells spending plunged at a 48.7 percent annual pace in the first quarter, leading investment on nonresidential structures to contract at a 23.1 percent rate.

That contributed to holding down gross domestic product growth to a 0.2 percent rate, according to the government's advance estimate. Data on trade and wholesale inventories, however, suggest the economy contracted in the first three months of the year.

The NFIB survey also found an increase in the number of owners saying stocks were too low and that they had plans to increase inventory investment. This could be a positive for growth in the second quarter after businesses amassed huge stocks of goods at the start of the year, which was seen as at least partly unintended.

Owners were downbeat on sales, but surprisingly optimistic about earnings. The survey's labor market indicators showed further signs of the job market tightening, with an increase in the share of owners saying they could not find qualified workers for open job positions.

While a separate report from the Labor Department showed a dip in job openings in March, in line with weak payrolls growth that month, the overall trend painted a solid employment picture.

Job openings slipped 150,000 to 5 million. They were, however, up 18.6 percent from a year ago.

There was an increase in the number of people voluntarily quitting their jobs, a sign of confidence in the labor market.

"Confidence in the labor market has obviously returned ... people are quitting their jobs because they have options and opportunities," said Chris Rupkey, chief financial economist at

MUFG Union Bank in New York.


(Reporting by Lucia Mutikani; Editing by Chizu Nomiyama)

  • Is Grifols, S.A.'s (BME:GRF) ROE Of 12% Impressive?
    Business
    Simply Wall St.

    Is Grifols, S.A.'s (BME:GRF) ROE Of 12% Impressive?

    With that in mind, this article will work through how we can use Return On Equity (ROE) to better understand a business. Over the last twelve months Grifols has recorded a ROE of 12%. How Do You Calculate ROE?

  • The Valeo (EPA:FR) Share Price Is Down 40% So Some Shareholders Are Getting Worried
    Business
    Simply Wall St.

    The Valeo (EPA:FR) Share Price Is Down 40% So Some Shareholders Are Getting Worried

    Truth be told the share price declined 40% in three years and that return, Dear Reader, falls short of what you could have got from passive investing with an index fund. To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.

  • Imagine Owning Dynavax Technologies (NASDAQ:DVAX) And Trying To Stomach The 73% Share Price Drop
    Business
    Simply Wall St.

    Imagine Owning Dynavax Technologies (NASDAQ:DVAX) And Trying To Stomach The 73% Share Price Drop

    Anyone who held Dynavax Technologies Corporation (NASDAQ:DVAX) for five years would be nursing their metaphorical wounds since the share price dropped 73% in that time. And we doubt long term believers are the only worried holders, since the stock price has declined 62% over the last twelve months. Even worse, it's down 8.3% in about a month, which isn't fun at all.

  • What Kind Of Shareholders Own Deere & Company (NYSE:DE)?
    Business
    Simply Wall St.

    What Kind Of Shareholders Own Deere & Company (NYSE:DE)?

    Every investor in Deere & Company (NYSE:DE) should be aware of the most powerful shareholder groups. Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies. Companies that used to be publicly owned tend to have lower insider ownership.

  • Novavax kicks off late-stage trial for new seasonal flu vaccine
    Business
    American City Business Journals

    Novavax kicks off late-stage trial for new seasonal flu vaccine

    Novavax Inc. has officially started a late-stage clinical trial for its seasonal flu vaccine, a critical phase for the Gaithersburg biotech vying for a much-needed win this time around. The company is launching the phase 3 study for NanoFlu, its seasonal influenza candidate, after several devastating disappointments this year, starting with a failed late-stage trial for ResVax, its RSV vaccine for newborns given through maternal immunization. “This is an important step forward in Novavax's efforts to gain approval for NanoFlu, which we believe will better protect older adults from the serious medical complications of influenza through our novel vaccine technology,” said President and CEO Stanley Erck in a statement.

  • Hong Kong Protesters Shift Tactics as Demonstrations Stretch Into Fifth Month
    World
    Meredith Videos

    Hong Kong Protesters Shift Tactics as Demonstrations Stretch Into Fifth Month

    Tearing a page out of ancient Chinese military philosophy, black-clad protesters in Hong Kong changed tactics and wreaked havoc by popping up in small groups in multiple locations across the city Sunday, pursued by but also often eluding police who m

  • Investors Who Bought Newmark Group (NASDAQ:NMRK) Shares A Year Ago Are Now Down 12%
    Business
    Simply Wall St.

    Investors Who Bought Newmark Group (NASDAQ:NMRK) Shares A Year Ago Are Now Down 12%

    One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement. During the unfortunate twelve months during which the Newmark Group share price fell, it actually saw its earnings per share (EPS) improve by 43%. It's quite possible that growth expectations may have been unreasonable in the past.

  • Catch a Ride on This 'Left to Right' Stock
    Business
    TheStreet.com

    Catch a Ride on This 'Left to Right' Stock

    "Left to Right" stocks are those whose revenue, earnings and share price move inevitably higher over time. The stocks often fluctuate quite a bit along the way, though, providing nice entry and exit points for traders. United Rentals appears to fall into that category.

  • Tesla to start Powerwall home battery installations in Japan
    Business
    Reuters

    Tesla to start Powerwall home battery installations in Japan

    Tesla Inc will start installing its Powerwall home power storage batteries in Japan next spring, the U.S. electric car and battery maker said on Tuesday, marking the product's debut in Asia. The 13.5 kilowatt-hour (kWh) Powerwall can store power generated by solar panels and costs 990,000 yen ($9,135), including the Backup Gateway system which manages the grid connection, but excluding installation costs and retail tax. It will be sold directly online by Tesla or via certain third-party installers.

  • Those Who Purchased Big Lots (NYSE:BIG) Shares Five Years Ago Have A 51% Loss To Show For It
    Business
    Simply Wall St.

    Those Who Purchased Big Lots (NYSE:BIG) Shares Five Years Ago Have A 51% Loss To Show For It

    While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time. While the share price declined over five years, Big Lots actually managed to increase EPS by an average of 6.6% per year.

  • Were Hedge Funds Right About Warming Up To Hormel Foods (HRL)?
    Business
    Insider Monkey

    Were Hedge Funds Right About Warming Up To Hormel Foods (HRL)?

    It is estimated that this group of investors manage most of the smart money's total capital, and by monitoring their finest stock picks, Insider Monkey has spotted several investment strategies that have historically surpassed the market. Insider Monkey's flagship hedge fund strategy beat the S&P 500 index by around 5 percentage points per annum since its inception in May 2014. We were able to generate large returns even by identifying short candidates.

  • Hedge Funds Are Betting On EnLink Midstream LLC (ENLC)
    Business
    Insider Monkey

    Hedge Funds Are Betting On EnLink Midstream LLC (ENLC)

    EnLink Midstream LLC (NYSE:ENLC) was in 12 hedge funds' portfolios at the end of June. ENLC shareholders have witnessed an increase in activity from the world's largest hedge funds recently. There were 10 hedge funds in our database with ENLC holdings at the end of the previous quarter.

  • Charles Schwab senior exec speaks candidly about being among the latest layoffs
    Business
    American City Business Journals

    Charles Schwab senior exec speaks candidly about being among the latest layoffs

    The Financial Women of San Francisco in June named Terri Kallsen as its 2019 Financial Woman of the Year, recognizing her work and mentoring of other women as executive vice president of investor services at Charles Schwab. In accepting the recognition Oct. 11 at the Financial Women's annual lunch to raise scholarship funds, Kallsen tackled her employment status head on. Schwab said Kallsen's position was eliminated as part of recent expense reductions that included cutting 600 jobs, or 3 percent of its workforce, as the brokerage adjusts to cost pressures, including lower interest rates.

  • A 'seasonal' suspension becomes permanent: RDU loses a West Coast service
    Business
    American City Business Journals

    A 'seasonal' suspension becomes permanent: RDU loses a West Coast service

    Alaska Airlines confirms it is permanently cutting one of Raleigh-Durham International Airport's West Coast services. The airline had previously scheduled a seasonal suspension for its nonstop from RDU to San Francisco, with a spokesman saying the flight would resume in April of 2020. The San Francisco route is among RDU's biggest revenue generators, according to OAG.

  • If You Had Bought Diageo (LON:DGE) Stock Five Years Ago, You Could Pocket A 85% Gain Today
    Business
    Simply Wall St.

    If You Had Bought Diageo (LON:DGE) Stock Five Years Ago, You Could Pocket A 85% Gain Today

    Generally speaking the aim of active stock picking is to find companies that provide returns that are superior to the market average. To wit, the Diageo share price has climbed 85% in five years, easily topping the market return of 8.1% (ignoring dividends). One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.

  • Pinterest Stock Is Richly Valued and Running out of Room to Run
    Business
    InvestorPlace

    Pinterest Stock Is Richly Valued and Running out of Room to Run

    Pinterest (NYSE:PINS) is down 30% from its all-time high of $36.83/share with Pinterest stock currently trading around $25.80/share, well above April's IPO price of $19/share. The social media platform continues to see explosive growth. But the upside potential could already be priced into shares.

  • What to watch ahead of Netflix earnings this week
    Business
    Yahoo Finance Video

    What to watch ahead of Netflix earnings this week

    Netflix is gearing up to report quarterly earnings this week, as the streaming company is facing more competition in the space from Disney and Apple. R "Ray" Wang, founder and principal analyst at Constellation Research, joins Akiko Fujita on The Ticker to discuss.

  • Exclusive: No choice but to invest in oil, Shell CEO says
    Business
    Reuters

    Exclusive: No choice but to invest in oil, Shell CEO says

    Royal Dutch Shell still sees abundant opportunity to make money from oil and gas in coming decades even as investors and governments increase pressure on energy companies over climate change, its chief executive said.     But in an interview with Reuters, Ben van Beurden expressed concern that some shareholders could abandon the world's second-largest listed energy company due partly to what he called the "demonisation" of oil and gas and "unjustified" worries that its business model was unsustainable. Shell, which supplies around 3% of the world's energy, set out in 2017 a plan to halve the intensity of its greenhouse emissions by the middle of the century, based in large part on building one of the world's biggest power businesses.

  • Walmart Inc. (NYSE:WMT) Insiders Have Been Selling
    Business
    Simply Wall St.

    Walmart Inc. (NYSE:WMT) Insiders Have Been Selling

    We often see insiders buying up shares in companies that perform well over the long term. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So we'll take a look at whether insiders have been buying or selling shares in Walmart Inc.

  • Business
    MarketWatch

    Aphria shares rocket 22% premarket after company posts surprise Q1 profit

    U.S.-listed shares of Canadian cannabis company Aphria Inc. (apha)(ca:apha) rose 22% in premarket trade Tuesday, after the company posted a profit for its fiscal first quarter, and not the loss that analysts were expecting. Leamington, Ontario-based Aphria said it had net income of C$16.4 million ($12.4 million), or 7 cents a share, after net income of C$21.2 million, or 9 cents a share, in the year-earlier period. Revenue was below the C$128.6 million posted for the fourth quarter, due to a change in business strategy at CC Pharma to maximize profitability after recent changes in the German government's medical reimbursement model.

  • Should You Take Comfort From Insider Transactions At Blink Charging Co. (NASDAQ:BLNK)?
    Business
    Simply Wall St.

    Should You Take Comfort From Insider Transactions At Blink Charging Co. (NASDAQ:BLNK)?

    We often see insiders buying up shares in companies that perform well over the long term. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So we'll take a look at whether insiders have been buying or selling shares in Blink Charging Co. (NASDAQ:BLNK).

  • Are Hedge Funds Going To Get Burned By Cronos Group Inc. (CRON) ?
    Business
    Insider Monkey

    Are Hedge Funds Going To Get Burned By Cronos Group Inc. (CRON) ?

    Is Cronos Group Inc. NASDAQ:CRON) a bargain? Prominent investors are becoming more confident.

  • JPMorgan Earnings Top, Dow Stock Set To Reclaim Buy Point; Citigroup, Goldman, Wells Fargo On Tap
    Business
    Investor's Business Daily

    JPMorgan Earnings Top, Dow Stock Set To Reclaim Buy Point; Citigroup, Goldman, Wells Fargo On Tap

    JPMorgan Chase earnings topped third-quarter estimates early Tuesday, with Citigroup, Goldman Sachs and Wells Fargo all due to report before the open. JPMorgan stock rose, signaling a move back above a buy point. Citigroup stock and Goldman Sachs stock were setting up in bases, with Citi flirting with a breakout.

  • The Upside to Facebook’s Libra Disaster
    Business
    Bloomberg

    The Upside to Facebook’s Libra Disaster

    If Facebook really wants to bring financial services to the “unbanked,” it should try doing it on a smaller scale than these companies' presence promised. It's clear why PayPal Holdings Inc., Stripe Inc., eBay Inc., MasterCard Inc. and Visa Inc. have decided not to join the Libra Association, which Facebook has been organizing to run the proposed digital currency.

  • Hedge Funds Have Never Been More Bullish On Nielsen Holdings plc (NLSN)
    Business
    Insider Monkey

    Hedge Funds Have Never Been More Bullish On Nielsen Holdings plc (NLSN)

    The following article will discuss the smart money sentiment towards Nielsen Holdings plc (NYSE:NLSN). Is Nielsen Holdings plc (NYSE:NLSN) a bargain? The smart money is taking an optimistic view.