Stocks Open Lower On Payroll Data; Broadcom Rockets – Investor’s Business Daily

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Stocks opened with losses Friday after a surprisingly weak reading on May employment.

The Dow Jones industrial average, S&P 500 and Nasdaq were down 0.5%.

Broadcom (AVGO), Ambarella (AMBA), Gap (GPS) and Zumiez (ZUMZ) had sharp movements at the open.

The stock market today took a hit from the Labor Department’s May payrolls report, which showed nonfarm payrolls increased by 38,000, far below economists’ consensus projections for 158,000 added jobs. Employment in health care increased, the report said, while mining jobs decreased and information sector numbers were weakened by the Verizon (VZ) strike. The unemployment rate nonetheless decreased 30 basis points to 4.7%, better than expectations for 4.9%.

The trade deficit narrowed sharply in April, according to figures from the Commerce Department. It estimated a deficit of $37.4 billion, down from an initial March estimate of $40.4 billion. The department also revised its March number lower, to $35.5 billion.

At 9:45 a.m. ET, researcher Markit reports its May services Purchasing Managers’ Index. At 10 a.m., the Institute for Supply Management delivers its May services index and the Commerce Department reports April factory orders. At 1 p.m. Baker Hughes (BHI) offers up its weekly rig count report.

In stocks, Broadcom stepped off to an 8% premarket gain Friday after reporting its fiscal-second-quarter results following the market’s close on Thursday. The IBD 50 stock ended Thursday’s session 3% below a cup-base buy point of 159.75.

Ambarella surged 8.5% at the open. A key supplier of chips for GoPro (GPRO) video cameras, Ambarella reported solid first-quarter results and a $75 million share repurchase initiative late Thursday. The stock is fighting to start up the right side of an 11-month consolidation.

Gap (GPS) popped 5% after reporting its May same-store sales at outlets open more than a year decreased less than forecast.

Zumiez (ZUMZ) took a 7% dive. The Lynwood, Wash.-based youth sportswear retailer reported late Thursday its first-quarter sales and losses bested analyst targets, but management guided second-quarter earnings and revenue below consensus views.

Oil prices eased lower early Friday. West Texas Intermediate held just above $49 a barrel, a fraction lower for the week. Gold edged up above $1,214 an ounce, effectively flat on the week. The dollar and bonds also traded essentially flat.

Internationally, markets across Asia booked moderate gains Friday. China ended a strong week with the Shanghai composite up 4.1%, and Hong Kong’s Hang Seng index rising 1.8%. In Japan, Tokyo’s Nikkei 225 ended the week down 1.1%.

Europe’s markets were on positive ground near midday Friday, with the leading indexes in London, Paris and Frankfurt tracking toward mild losses for the week.