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Stocks Mixed On Jobs Report, Trade Data: Lenovo Takes A Dive

Stocks thrashed out a mixed open Friday, after a good-and-bad September jobs report and a smaller-than-forecast increase in the U.S. trade deficit.




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Eli Lilly (LLY) nailed another new high after an analyst upgrade. Tesla (TSLA) dropped more than 3%, as a fresh series of tweets from Chief Executive Elon Musk taunted both the Securities and Exchange Commission and short sellers. Costco Wholesale (COST) tumbled on its fiscal fourth-quarter results. China’s Lenovo Group (LNVGY) tanked on the heels of a Bloomberg report on military-industrial espionage.

The Dow Jones industrial average edged a fraction lower. The S&P 500 scratched out a 0.2% gain as General Electric (GE) and Nordstrom (JWN) topped the list, and IPG Photonics (IPGP) posted its worst decline.

The Nasdaq Composite shook off its opening losses and rose 0.2%. Biomarin (BMRN) and Seagate Technologies (STX) were early leaders on the Nasdaq 100, while Tesla, Illumina (ILMN) and Costco led the downside.

Among the closely watched marijuana stocks and related names, Tilray (TLRY) rolled an early 4% gain. India Globalization (IGC) dived nearly 22%. New Age Beverage (NBEV) rose more than 3%, while Canopy Growth (CGC) and Cronos Group (CRON) added about 1% each.

Indexes: Tech Stocks, Small Caps Tumble

Results for the week through Thursday underscore the weakness in techs. The Nasdaq fell 2.1%, marking the deepest cut below support at its 50-day moving average since May.

The S&P 500 slipped 0.4% through Thursday, holding just above its 50-day line and a bit more than 1% below its Sept. 21 high. The Dow gained 0.6% for the week, but off Wednesday’s high as it continues to meet resistance right around the level of its January peak.

Small caps outpaced on the downside, with the S&P 600 down 2.8% and the Russell 2000 falling 2.9% through Thursday.

September Jobs Report, August Trade Data

U.S. nonfarm employers added 134,000 workers in September, the Labor Department reported. That was more than 50% below August’s 270,000 new hires, and well below forecasts for a slowdown to 180,000 added workers.

The unemployment rate dropped, however, to 3.7% — down from 3.9% in August and beating views for an improvement to 3.8%. September reportedly marked the lowest unemployment rate since 1969.

The critical gauge of earnings growth slowed to 0.3% month-over-month, down from 0.4% and meeting expectations. On an annual basis, earnings edged up to a 2.9% gain, better than August’s 2.8% increase and also meeting analyst targets.

The U.S. trade deficit widened to $53.2 billion in August, the Commerce Department reported. That was better than the increase to $53.7 billion expected by economists, but still a significant increased over July’s $50.1 billion trade gap.

Baker Hughes (BHGE) serves up its weekly rig count survey at 1 p.m. ET. The Federal Reserve reports August consumer credit numbers at 3 p.m. ET.

GE Leaps; Eli Lilly Gains On Upgrades; Tweets Trip Tesla

General Electric (GE) punched 3.7% higher, bringing its gain for the week to more than 13%. The company announced late Thursday the pay package for Chief Executive Larry Culp paid as much as $21 million a year for four years. Culp could reportedly make “hundreds of millions of dollars more” through potential gains in GE’s stock.

Tesla shares fell 3.5% as the stock tracks toward an eighth weekly close below its 10-week moving average. Musk is still chief executive but is stripped of his chairman title by the SEC, launched a series of tweets late Thursday critical of both the SEC and short sellers.

Eli Lilly swung 1.8% higher after JPMorgan and BMO Capital raised their price targets on the drugmaker, following positive trial results of a type 2 diabetes treatment. BMO upgraded the stock to outperform, from market perform, and hoisted the price target to 130, from 107. JPMorgan lifted its price target to 123, from 117.

Lilly shares are up more than 7% for the week, and in a profit-taking zone following a breakout in July.

Costco Finds Flaw; Lenovo Stock On Watch

Costco Wholesale slumped 2.4% after reporting late Thursday its fiscal fourth-quarter earnings and revenue narrowly topped views. Management warned the company had discovered a “material weakness” in its finance-related IT systems. Costco shares have staged a modest pullback from a mid-September high, and are testing support at their 10-week moving average.

U.S.-traded shares of China’s Lenovo Group (LNVGY) dived 14% at Friday’s open. Lenovo’s Hong Kong shares short-circuited, diving as much as 23% in China on Friday, as investors reacted to a Bloomberg report that China’s military had placed surveillance chips in some server motherboards manufactured for U.S.-based Super Micro Computer (SMCI).

Super Micro and other U.S. companies named in the report denied the claims. A statement from Lenovo said the company takes “extensive steps to protect the ongoing integrity of our supply chain.” Lenovo shares ended Thursday up 73% from a May low, but still deep in a three-year correction.

Global Markets: Europe Falls Hard After Jobs Report

Global markets moved almost unanimously lower, continuing to feel pressure from bond and currency markets. In China, Hong Kong’s Hang Seng Index slipped 0.2%, taking a 4.6% loss in its worst week since February. Mainland markets reopen Monday, following China’s Golden Week holiday shutdown.

In Japan, Tokyo’s Nikkei 225 tumbled 0.8%, down 1.4% in a week where losses were chalked up to profit taking after the market’s three-week rally to a 27-year high.

Europe’s markets were down hard, as bond yields and concerns over Italy’s economy rose, and following the U.S. payrolls report. London’s FTSE 100 was down 1.1% in afternoon trade. Frankfurt’s DAX showed a 0.9% loss and the CAC-40 in Paris was off 0.8%.

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