Jobs-Induced Rally Fades in U.S. as Wall Street Preps for IPO-Packed Week
Call it a relief rally, or a jobs-related bounce. But U.S. stocks were off the charts on Friday. The Dow rallied 217 points or 1.7%, the Nasdaq and S&P 500 added 2% each.
All three major averages were positive for the week.
U.S. futures this Monday morning are flat, with investors questioning if profit-taking is the name of the game given the size of Friday's run up.
Fed Chairman Ben Bernanke will deliver remarks later this morning to a conference on wealth research, but aside from that, it's a relatively quite week on the economic calendar.
But investors are bracing for a downpour of IPOs this week. Wall Street is expected to welcome six new companies, looking to raise more than $1 billion.
One of the biggest is UK soccer club Manchester United. The mega-sports franchise is looking to raise $300 million and price shares between $16 and $20.
Outback Steakhouse operator Bloomin Brands is looking to raise the same. Another food giant, Carl's Jr. and Hardee's owner CKE Inc., is planning to chalk up $200 million in a public share listing this week.
Performance Financial, Peregrine Semiconductor, and Stemline Therapeutics are also expected to go public.
And flashing back to Friday... that July jobs report was a doozy, wasn't it? The unemployment rate rose a tick to 8.3% even as 155,000 people left the work force altogether (so they weren’t even considered in the unemployment rate).
What's worse: we're now seeing that not only is unemployment exacerbating, but so is under-employment, or those who want to work full-time but can't find a job. Nationally, the under-employment rate rose 15% last month, and in some states, it's much, much higher. Nevada's under-employment rate tops 22%; California's tops 20%.
Southwest Airline's attempt to thank its friends only created more enemies. On Friday, the airline tried to reward its three million Facebook friends with 50% off deals to certain cities. But the promotion quickly backfired after a technology glitch caused some customers to be billed as much as 20X for a single seat.
Southwest Airlines (NYSE:LUV) is issuing refunds to affected customers, but that can take up to 10 days.