Jobs Report Well Below Expectations

Morning News of Note:

• XOM: $92 Million More Is Sought for Exxon Valdez Cleanup When the Justice Department and the State of Alaska reached their $900 million court settlement with the Exxon Corporation over the environmental damages caused by the Exxon Valdez oil spill, they agreed that, if unforeseeable damages occurred later, the two governments had 15 years to ask for $100 million more. On Thursday, with the deadline approaching, the governments exercised this clause (Full Story) NY Times
• GS: Two or one at the top?Goldman decides today-FT: The board of Goldman Sachs (GS) will decide today whether to give the roles of chairman and chief executive to Lloyd Blankfein, or split them. The Financial Times reports that some directors want a chairman with more investment banking experience, such as Lord Browne, outgoing chief executive of British Petroleum; John Bryan, former chief executive of Sara Lee, or Stephen Friedman, previously senior partner and co-chairman of the firm's management committee before the bank’s initial public offering in 1999
• MMM: 3M Company-MMM plans to build safety products manufacturing plant in South Korea: MMM announced Thursday its intent to build a safety products manufacturing plant in Hwaseong, South Korea, near Seoul, to meet the growing demand for respiratory protection products in Asia and to better serve its customers in the region. The continued growth in manufacturing activities in Asia, combined with greater awareness of workplace safety practices, is driving strong demand for respiratory protection products
• SBUX: Starbucks-SBUX reports May SSS up 7%: Consensus was for up 7.4%.
• Mad Money Summary: Cramer opened his show last night telling his viewers to buy orphans, or stocks that Wall Street has decided to ignore. Perfect stocks are overcovered by analysts, so it is hard to make money investing in them. Cramer's orphan recommendations were Intuitive Surgical (ISRG), Whole Foods (WFMI), Commerce Bancorp (CBH), Quest Diagnostics (DGX) and Chico's (CHS). Cramer then gave five more orphan suggestions, Dynamic Materials (BOOM), Electro Rent (ELRC), Netscout systems (NTCT), Layne (LAYN), and Vaalco (EGY). He said viewers should email him and tell him which they liked best, and the winning orphan will be announced on the June 2 show. In the "Lightning Round," Cramer was bullish on Trinity (TRN), Boardwalk (BWP), Apple Computer (AAPL), Nabors (NBR), Sears (SHLD), Bank of America (BAC), Citigroup (C), Sirenza (SMDI), Corning (GLW), U.S. Concrete (RMIX), Ciena (CIEN), Fuel Tech (FTEK), Gerdau (GGB), and World Wrestling (WWE), and was bearish on People's Bank (PBCT).

Market Comments: The payrolls number came in at +75,000 vs. consensus for +170,000. That's a pretty weak number, and had mixed reactions in the financial markets. Bond yields plunged on the news (5.02%), as it signals weaker economic growth. The stock market rallied, as the odds of a June Fed rate hike fell to below 50%. Of course, the stock market doesn't want economic growth to get too weak, so this report is a bit of a double-edged sword.

I continue to see defensive type stocks garnering more investor interest here. Stocks like K and GIS are much stronger than more economically sensitive stocks. So the market seems to be placing bets on the economy slowing as well.

The SPX rallied up to 1290 this morning before turning lower. It's overhead 50-day lies around 1295, so this is a logical area of initial resistance. I would not be surprised to see the SPX consolidate the last couple days of gains before making another stab higher.

long GS, XOM