Friday’s jobs report came in better than expected. However, the positive news was outweighed by concerns over tensions in Ukraine, and the markets closed mixed.
The Dow gained 30 points, the S&P 500 Index inched up 1, and the Nasdaq dropped 15. Eighteen of the Dow’s thirty components gained ground, led by Nike (NKE), which rose 1%. Declining issues outnumbered advancers by four to three on the NYSE and fractionally on the Nasdaq. The prices of Treasuries fell. The price of gold futures lost 1% to $1,338.20 an ounce, and the price of crude oil on the New York Mercantile Exchange gained 1% to $102.58 a barrel.
All of the markets posted gains for the week. The Dow and S&P 500 Index each rose 1%. The Nasdaq climbed nearly 2% and notched its fifth-straight weekly gain.
In Earnings News:
- Big Lots, which specializes in selling overstocks and discounted goods, announced that earnings slid 30% last quarter as a result of a decrease in same-store sales. However, its sales figures beat analysts’ expectations, sending the company’s shares (BIG) higher by 22%.
- Shares of headphone maker Skullcandy (SKUL) jumped 24% today after the company announced earnings that topped estimates. Earnings fell 69%, but CEO Hoby Darling said, “2013 was a year of tremendous positive change geared toward executing our turnaround strategy.” Skullcandy’s fourth-quarter profits came in at 13 cents a share, down from 41 cents a year ago, but analysts expected only 9 cents a share.
- Retailer Foot Locker’s fourth-quarter earnings rose 19% on higher same-store sales. The company reported profits of 81 cents a share, up from 68 cents a share last year, beating the Street’s estimate of 75 cents a share. The stock (FL) climbed 8%.
In Other Business News:
- The U.S. economy added 175,000 jobs last month, according to the Labor Department. Many economists expected the harsh winter to have a negative impact on payrolls, but the number came in higher than expected, signaling underlying strength in the economy. The unemployment rate rose by 0.1% to 6.7% due to more people entering the workforce. December and January’s nonfarm payroll numbers were revised higher by a total of 25,000.
- Coupons.com is the latest company to take advantage of a strong IPO market in 2014. The company raised $168 million by selling 10.5 million shares at $16 a share and skyrocketed over 101% during the day’s trading. Coupons.com (COUP) ended the day up 88%.
- The country’s second-largest supermarket chain, Safeway, is being purchased by an investment group led by Cerberus Capital Management for $9 billion, or $40.10 a share. Cerberus controls Albertsons, the country’s fifth-largest chain, and according to terms of the deal, the two brands will merge, resulting in 2,400 stores across the country. The deal is in its early stages, and Safeway will accept other bids for the next 21 days. Investors were disappointed in the details of the sale, and Safeway’s stock (SWY) fell 1%.
- Although U.S. exports increased by 0.6% in January, that jump was offset by an increase in oil imports and other goods, and the U.S. trade deficit increased by 0.3%.
When I was a kid, I found a few of my mom’s old Nancy Drew books in my grandparents’ basement. They were pretty dusty and musty, but what nine-year-old girl could resist “The Secret of the Old Clock”? And my love for mysteries (and I think my hay fever) was born.
Through the years, I added to my library, and Nancy’s outfits on the book covers morphed from dresses and pearls to jean jackets and miniskirts. Generations have grown up with her. But one thing never really occurred to me until now—each of these books was authored by Carolyn Keene. Nancy Drew made her first appearance back in 1930, so that would make Ms. Keene well over one hundred and some years old. Pretty impressive writing career, except that you’ve figured out what would escape a kid. Carolyn Keene is just as made up as Nancy Drew.
It’s called book packaging. A publisher creates a character, a storyline, and a pen name and hires authors to fill in the blank. Back in the 1930s, a ghostwriter would be paid $125 for a book (although that dropped to $75 during the Depression). No royalties, either.
The practice is still going strong today. A few years ago, James Frey (known for publishing a best-selling memoir that may have been more fiction than fact) launched a firm called Full Fathom Five. The company searches for ideas that can be developed into series of books, just like the Stratemeyer Syndicate did with Nancy Drew and the Hardy Boys in the first half of the 20th century. The difference today is that the ultimate goal is to make these series into film franchises and marketing and merchandising machines. Today’s writers (just like the ones a century ago) are typically paid a flat fee, as little as $250 up front and $250 upon completion of the book. Unlike their predecessors, however, these writers are promised 30% to 49% of revenue.
Books produced by Full Fathom Five are highly influenced by the cinematic experience. One particular novel, “I Am Number Four,” wasn’t even finished when DreamWorks bought the movie rights, so when the producers made changes to the story, the book was rewritten to match. And the company just announced a new young adult series called “Endgame,” which will consist of three books; nine novellas; YouTube videos; games; and, of course, a $2 million movie deal.
I wish I were kept in the dark about these things. I didn’t need to know Carolyn Keene didn’t exist, and I don’t want to know if the next book I read was crowdsourced to make sure it appealed to the widest audience available. It’s like finding out your favorite singer didn’t write their own songs. (What? Miley Cyrus didn’t write “Wrecking Ball” because she was devastated after her breakup? What is this world coming to?)
Does it matter who writes your favorite books or music? Or is the quality all that matters? Let us know by leaving a comment below.