Stocks were headed slightly higher on Friday after employers added new jobs numbers that surpassed expectation. The Labor Department reported that there were an addition of 175,000 new jobs added in February even with the harsh winter weather that swept across the country. This followed an addition of 129,000 jobs in January. Paul Dales, an economist with Capital Economics, said, “If the economy managed to generate 175,000 new jobs in a month when the weather was so severe, once the weather returns to seasonal norm…employment growth is likely to accelerate further.” The positive data was surprising due to the fact that many factories were closed because of the bad weather. Even though February’s new job additions were a welcome surprise, they were still below the 12 month average of 189,000. There was an addition of 15,000 new jobs in the construction sector, which usually takes a big hit when winter weather hits. There was also an addition of 6,000 new jobs in manufacturing and a 13,000 addition in the government. December’s job additions were upwardly revised from the original 75,000 to 84,000 and January’s was upwardly revised from 113,000 to 129,000. The unemployment rate inched up from last month’s five-year low of 6.6% to 6.7%.
Shares of Safeway Inc. were trading down over 3% after the company announced that they would be acquired by Cerberus Capital Management. The deal will total about $9.4 million. Safeway is one of the largest U.S. chain grocery stores. The deal will run Cerberus about $40 per share, which is at a 1.3% premium over the closing price on Thursday. Cerberus also owns the popular Albertsons franchise. The merge will create the most dominant chain on the West Coast and total 2,400 grocery stores and house 250,000 employees. Robert Edwards, Safeway CEO who will become CEO of the new firm, said, “This is a clear and compelling rationale for this merger. This merger will improve our competitive position.” He also said that the synergies trickle down to operation savings and lower consumer prices.
Facebook, Inc (FB) was trading slightly lower after the company reported that they would be expanding their server farm in Sweden. This was their first opening outside of the United States for the company. The plant is located in Lulea, northern Sweden, and they will be adding on a new data center. Facebook (FB) said that they will be implementing new technology that will nearly double the speed of construction. The plant was originally created in an effort to improve the company’s performance in Europe. An actual construction date has not been released.
That’s all for the day. Have a great weekend!
All the best,