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Unleash The Bulls: Surge In September Hiring Data Jolts Markets Higher

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Unleash The Bulls: Surge In September Hiring Data Jolts Markets Higher
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U.S. markets rose sharply after the U.S. government reported that 248,000 jobs were created in September, bringing the unemployment rate to 5.9 percent, the lowest it has been since July 2008.

In addition to the jobs report, data from the U.S. government showed the trade deficit narrowing in August.

Alcoa Inc (NYSE: AA) will unofficially kick off earnings season with its third quarter results next Wednesday.

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  • The U.S. dollar advanced against other global currencies as gold declined. The yield on the 10-year Treasury note rose to 2.44 percent.
  • The Dow gained 1.24 percent, closing at 17,009.69.
  • The S&P 500 gained 1.12 percent, closing at 1,967.90.
  • The Nasdaq gained 1.03 percent, closing at 4,475.62.
  • Gold lost 1.86 percent, trading at $1,195.10 an ounce.
  • Oil lost 1.44 percent, trading at $87.80 a barrel.

Silver lost 1.18 percent, trading at $16.84 an ounce.

News Of Note

September Nonfarm Payrolls rose 248,000 (versus consensus of a gain of 210,000) as unemployment fell to 5.9 percent (versus expectations of 6.1 percent) from 6.1 percent in August.

August Trade Balance improved to -$40.1 billion (versus expectations of -$40.6 billion) from -$40.3 billion in July. Imports totaled $238.6 billion while exports totaled $198.5 billion.

September U.S. PMI Services Index fell to 58.9 (versus expectations of 58.7) from 59.5 in August.

September ISM Non-Manufacturing Index fell to 58.6 (versus expectations of 58.5) from 59.6 in August.

Analyst Upgrades And Downgrades Of Note

Analysts at Deutsche Bank downgraded Apple Inc. (NASDAQ: AAPL) to Hold from Buy with a price target lowered to $102 from a previous $105. Shares lost 0.28 percent, closing at $99.62.

Analysts at Nomura downgraded Cliffs Natural Resources Inc (NYSE: CLF) to Reduce from Buy with a price target lowered to $5 from a previous $18. Shares plunged to new 52-week lows of $8.22 before closing the day at $8.32, down 16.80 percent.

Analysts at Oppenheimer maintained a Perform rating on Costco Wholesale Corporation (NASDAQ: COST) with a price target raised to $120 from a previous $105. Shares gained 1.03 percent, closing at $127.09.

Analysts at Canaccord Genuity maintained a Buy rating on Cree, Inc. (NASDAQ: CREE) with a price target lowered to $41 from a previous $64. Also, analysts at Needham downgraded Cree to Hold from Buy. Shares lost 3.23 percent, closing at $33.73.

Analysts at BTIG Research initiated coverage of Dish Network (NASDAQ: DISH) with a Buy rating and $85 price target. Shares gained 2.49 percent, closing at $65.16.

Analysts at Northland Securities downgraded FireEye Inc (NASDAQ: FEYE) to Underperform from Market Perform with a price target lowered to $25 from a previous $34. Shares lost 4.73 percent, closing at $28.19.

Analysts at Morgan Stanley downgraded Melco Crown Entertainment Ltd (NASDAQ: MPEL) to Equal-Weight from Overweight. Shares lost 0.04 percent, closing at $24.80.

Analysts at Credit Suisse maintained a Neutral rating on Morgan Stanley (NYSE: MS) with a price target raised to $36 from a previous $33. Shares gained 2.25 percent, closing at $35.05.

Analysts at Sterne Agee initiated coverage of Salesforce.com (NYSE: CRM) with a Buy rating and $70 price target. Also, analysts at Societe Generale initiated coverage of Salesforce with a Buy rating and $74 price target. Shares gained 3.21 percent, closing at $58.46.

Analysts at Societe Generale initiated coverage of Workday (NASDAQ: WDAY) with a Hold rating and $91 price target. Shares gained 2.07 percent, closing at $83.33.

Analysts at Morgan Stanley maintained an Equal-Weight rating on Yum! Brands (NYSE: YUM) with a $72 price target. Shares gained 0.15 percent, closing at $71.63.

Equities-Specific News Of Note

Re/code's John Paczkowski reported that Apple will host an iPad event on October 16. Shares lost 0.28 percent, closing at $99.62.

JPMorgan (NYSE: JPM) confirmed that a recent data breach exposed contact information of 76 million households and seven million small businesses. Shares gained 2.48 percent, closing at $60.30.

Facebook Inc (NASDAQ: FB) plans to enter the health care sector by creating online support communities that connect users suffering from similar ailments. Separately, the European Union regulators officially approved Facebook's acquisition of WhatsApp. Shares of Facebook gained 0.47 percent, closing at $77.44.

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GoPro Inc (NASDAQ: GPRO) announced it will “significantly” expand its presence inside retailers at 500 Best Buy stores with the Hero4 camera acting as a “centerpiece.” Shares of GoPro gained 1.77 percent, closing at $86.97.

Salix (NASDAQ: SLXP) and Ireland based Cosmo Pharmaceuticals terminated their $2.7 billion agreement because of a “changed political environment.” Shares of Salix gained 1.18 percent, closing at $152.87.

Linn Energy (NYSE: LINE) has sold oil production assets for $2.3 billion to repay debt it assumed from its acquisition of Devon Energy assets in August. Shares lost 1.65 percent, closing at $28.60.

J.C. Penney (NYSE: JCP) plans to host an analyst day next week after a three-year hiatus. Shares gained 3.84 percent, closing at $10.00.

Walgreen Company (NYSE: WAG) reported that its front-end sales rose 2.2 percent in September while total sales rose 9.4 percent to $6.48 billion. Shares gained 1.71 percent, closing at $60.78.

According to The Wall Street Journal, Yahoo! Inc (NASDAQ: YAHOO) is near a deal to invest (an undisclosed amount) in Snapchat at a $10 billion valuation. Shares of Yahoo gained 1.31 percent, closing at $41.03.

UBS (NYSE: UBS) could face a fine as high as $6.3 billion for tax evasion in France as the bank encouraged France's citizens to open accounts in Switzerland between 2004 and 2011. The bank responded by stating that it will defend itself as the early reports are “speculative” and “not based on facts.” Shares hit new 52-week lows of $16.71 before closing the day at $16.80, down 2.33 percent.

Winners Of Note

Medtronic (NYSE: MDT) announced it will use $16 billion in external financing to complete its takeover of Covidien (NYSE: COV) rather than relying on foreign cash. There were no changes to the terms and agreements previously set forth by the companies. Shares of Medtronic gained 3.54 percent, closing at $65.02 while shares of Covidien hit new 52-week highs of $95.29 before closing the day at $93.89, up 5.72 percent.

According to Bloomberg, RadioShack Corporation (NYSE: RSH) finalized an agreement with Standard General and a consortium of other firms to lend the retailer $590 million ahead of the holiday shopping season. Shares gained 35.35 percent, trading at $1.34 prior to being halted.

Decliners Of Note

Adtran (NASDAQ: ADTN) issued third quarter guidance and expects its earnings to be in a range of $0.23 to $0.24, below the consensus estimate of $0.27. Revenue is guided to be in a range of $162 million to $163 million, also below the consensus estimate of $177.4 million. Shares hit new 52-week lows of $18.54 before closing the day at $18.81, down 7.34 percent.

The Wall Street Journal reported that Casablanca Capital discussed launching a campaign for Cliffs Natural Resources by activist consultant Michael McNamara of ROR Capital last year. However, the Journal found no instance of the relationship in Casablanca's regulatory filings, a rule requiring the firm to do so as a stakeholder with a 5 percent or more stake. Note: Cliffs Natural Resources was the recipient of a downgrade from Nomura today.

Quote Of The Day

"Before today, many Fed officials expected they would start raising their benchmark short-term interest rate from near zero in the middle of next year, and encouraged that view in the markets. The jobs report strengthens the hands of those who want to move before midyear." – The Wall Street Journal's Jon Hilsenrath in an article following Friday's Job Reports data.

Latest Ratings for AAPL

DateFirmActionFromTo
Apr 2018Morgan StanleyMaintainsOverweightOverweight
Apr 2018Monness Crespi HardtInitiates Coverage OnBuy
Mar 2018BarclaysMaintainsEqual-WeightEqual-Weight

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