U.S. stocks and exchange traded funds (ETFs) are fluctuating in morning trading as investors continued to remain concerned about unemployment. Other positive economic indicators blossomed, however.
The ADP Employer Services Report indicated that the private sector shed 298,000 jobs in August, beating the 370,000 lost in July, but higher than the 250,000 anticipated by analysts. Although it appears the numbers are trending in the right direction, the report also suggests that employment is likely to continue to decline for several months to come.
On the positive side, the Labor Department stated that productivity rose at an annual rate of 6.6% in the second quarter, marking the largest advance in six years. This is of importance because worker productivity is the single biggest factor in determining living standards. Higher productivity means that workers can increase or sustain their living standards, and it also illustrates that companies are able to boost wages financed by rising output, states Martin Crutsinger of the Associated Press.
Factory orders rose in July as companies tried to prevent stockpiles from declining further. Bookings rose by 2.2%, the most since July 2007, fueled by stabilizing global markets and a rebound in the auto industry caused by the government’s “cash-for-clunkers” program. In fact, automakers showed sales of cars and light cars at a rate of 14.1 million, the highest number since May 2008, states Courtney Schlisserman of Bloomberg.
In the pharmaceutical world, the world’s largest drug maker, Pfizer (PFE), indicated that it would pay a record $2.3 billion penalty over allegations that it had marketed the pain reliever Bextra and possibly other products for medical conditions different from their approved use. This settlement is the largest ever paid by a drug company for alleged violations of federal drug rules. The news sent the Pharmaceutical HOLDRs (PPH) down nearly 0.3% in morning trading. Pfizer is 14.3%.