A private survey shows that U.S. businesses added just 130,000 jobs in October, as the 16-day partial government shutdown slowed an already-weak job market.
Payroll processor ADP also said Wednesday that companies created just 145,000 jobs in September, far below the 166,000 it had reported earlier this month. The job market had been weakening even before the shutdown started Oct. 1.
Hiring was especially sluggish among companies with fewer than 500 employees. Job creation at services companies fell to 107,000 in October from 130,000 last month.
“The ADP data are pointing to some negative effects from the turmoil in Washington,” said Jim O’Sullivan, chief U.S. economist at High Frequency Economics.
The shutdown led some private contractors that do business with the government to temporarily lay off workers. It also may have prompted some companies to hold off on adding new workers.
The ADP survey covers only private businesses and did not reflect government furloughs caused by the shutdown.
Twitter was sued for $124 million by two financial firms that claim the social media company engineered a failed private sale of its shares in 2012 to strengthen its hand in preparation for its initial public offering.
The firms, Precedo Capital Group and Continental Advisors, sued Wednesday in Manhattan federal court, claiming Twitter fraudulently used the aborted sale, planned for as much as $278 million worth of shares, to set a $10 billion valuation for itself and a floor price for the IPO that’s just days away.
“Twitter never intended to complete the private sale of Twitter stock,” the firms said in their complaint. “Twitter’s intention was to induce Precedo Capital and Continental Advisors to create an artificial private market wherein Twitter could maintain that a private market existed at or about $19 per share for the Twitter stock.”
Twitter, based in San Francisco, is seeking as much as $1.4 billion in its IPO, which is scheduled to price Nov. 6. At the top of the proposed range, Twitter would be valued at $10.9 billion. While the company has more than doubled revenue annually, it hasn’t yet turned a profit and the pace of user growth is slowing.
“We’ve never had a relationship with these plaintiffs,” said Jim Prosser, a spokesman for Twitter. “Their claim is completely without merit.”
The microblogging service is in the middle of its eight-day roadshow, meeting investors in New York before heading to Boston and Chicago this week.
● PricewaterhouseCoopers, one of the Big Four accounting firms, agreed to acquire Booz & Co. to expand its advisory business. Terms were not disclosed. The deal would give PWC about 3,000 added employees in 57 locations worldwide. Booz partners are scheduled to vote on the transaction in December, the two firms said Wednesday.
● General Motors on Wednesday posted a better-than-expected third-quarter profit as the U.S. automaker’s new lineup of pickup trucks and other revamped models boosted North American results. Profit margins in the core North American market hit a two-year high on the strength of vehicles such as the Chevrolet Silverado pickup and Impala sedan, which allowed GM to boost pricing by $400 million. GM reported pretax profit of $2.64 billion for the third quarter, up almost 15 percent over a year ago.
● Chrysler Group said it will proceed with a public offering of shares before the end of the year. Italy’s Fiat owns the majority of Chrysler shares. Sergio Marchionne, who runs both companies, wants to combine them by purchasing the 41.5 percent of Chrysler now controlled by a trust run by the United Auto Workers union. The two sides disagree on the value of the trust’s shares, and on a conference call Wednesday, Marchionne said they haven’t reached a deal. “We are now bent on executing the IPO,” the CEO said. The IPO would consist of shares currently held by the trust.
● 8:30 a.m.: Weekly jobless claims released.
● 10 a.m.: Weekly mortgage rates released.
● Earnings: Exxon Mobil, MasterCard, New York Times.