Stocks fall following disappointing jobs report
NEW YORK — Investors retreated further from stocks Friday as the pile of disappointing economic reports grew larger.
A modest slide left stocks lower for a second week, the first consecutive drop since July. The Dow Jones industrial average fell for a fourth day, losing 22 points one day after sliding 203 on reports of weak manufacturing and a jump in claims for jobless benefits.
The loss Friday came as the government said employers cut more jobs than economists had expected last month and that orders at factories fell. The reports added to concerns that the economy’s recovery could be further off than had been hoped.
The Labor Department surprised investors with its report that employers shed 263,000 jobs last month. The cuts went beyond the 201,000 jobs lost in August and were far larger than the 180,000 economists expected. The unemployment rate ticked up to 9.8 percent from 9.7 percent as forecast.
The report is often the most anticipated piece of economic news each month because an eventual drop in unemployment is key to sustained recovery.
“There’s been a lot of talk particularly in the last couple of months that we’re seeing a turnaround in unemployment, and obviously that’s not the case,” said Dan Cook, senior market analyst at IG Markets in Chicago.
Meanwhile, the surprise drop in factory orders added to the lackluster economic readings of the past two weeks. The Commerce Department said factory orders fell 0.8 percent in August. Analysts had been expecting an increase.
The market’s optimism has been tested by economic data that have either weakened or fallen short of expectations, a disappointment after several months of hopeful signs from key industries like housing and manufacturing. That has led investors to question whether the 50 percent surge in stocks over the past six months can be sustained.
With nerves running high, stocks have fallen in seven of the last eight days. The Dow has lost about 4.3 percent since coming within 82 points of the 10,000 level on Sept. 23.
Bruce Shalett, managing partner, Wynston Hill Capital in New York said the jobs report was “a reminder that while things are not as dire as they were a year ago, we still have a lot of work to do.”
Many found the relatively calm response to the jobs report encouraging, taking it as a sign there are still investors willing to use the dips to pick up stocks they consider cheap.
“Pullbacks are going to constantly be used as opportunities to get into the market,” said Hank Smith, chief investment officer of equity at Haverford Investments in Radnor, Pa.
Some of Thursday’s slide was likely due to investors making bets that the employment number would indeed be bad. That would also help explain Friday’s muted selling. The Dow fell 21.61, or 0.2 percent, to 9,487.67, its lowest close since Sept. 4. The index fell as much as 79 points during trading.
The broader Standard & Poor’s 500 index fell 4.64, or 0.5 percent, to 1,025.21, and the Nasdaq composite index fell 9.37, or 0.5 percent, to 2,048.11.
Two stocks fell for every one that rose on the New York Stock Exchange, where consolidated volume came to 5.6 billion shares compared with 6 billion Thursday.
For the week, the Dow fell 1.8 percent, its biggest loss since early July. The S&P 500 index lost 1.8 percent after falling 2.2 percent last week. The Nasdaq fell 2 percent for the week.
Stocks are coming off a robust third quarter. Both the Dow and the S&P 500 index gained 15 percent in the July-September period. It was the Dow’s best quarter since 1998.
The fourth quarter may not be as stellar. Analysts expect the market to drift over the next few weeks as investors await companies’ earnings reports and their forecasts for the coming months. The last big pullback in the market came in the weeks before second-quarter earnings were announced in July.
“October is shaping up to be a challenging month for investors,” said Brent McQuiston, a vice president at WealthTrust-Arizona.
Strong earnings could help offset any growing concerns about a recovery and stabilize the market, he said, but solid revenue growth is what is needed to put the market on “firm footing.” In the second quarter, many companies’ sales were disappointing, and it was only through cost-cutting that profits were able to rise.
Yields on long-term Treasurys moved off their lowest levels since the spring. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.22 percent from 3.18 percent late Thursday.
The dollar was mixed against other currencies. Gold prices edged higher.
Crude oil fell 87 cents to settle at $69.95 a barrel on the New York Mercantile Exchange.
In other trading, the Russell 2000 index of smaller companies fell 3.55, or 0.6 percent, to 580.20.
Overseas, Britain’s FTSE 100 fell 1.2 percent, Germany’s DAX index lost 1.6 percent, and France’s CAC-40 tumbled 1.9 percent. Japan’s Nikkei stock average fell 2.5 percent.
_____
The Dow Jones industrial average closed the week down 177.52, or 1.8 percent, at 9,487.67. The Standard & Poor’s 500 index fell 19.17, or 1.8 percent, to 1,025.21. The Nasdaq composite index fell 42.81, or 2 percent, to 2,048.11.
The Russell 2000 index, which tracks the performance of small company stocks, fell 18.74, or 3.1 percent, for the week to 580.20.
The Dow Jones U.S. Total Stock Market Index — which measures nearly all U.S.-based companies — ended at 10,469.55, down 208.14, or 2 percent.
Related News
A snapshot of major employment categories and how they faredOctober 2nd, 2009 Job losses were widespread last monthA snapshot of major employment categories, and how they fared in the past two months:
Construction: Cut 64,000 jobs in September, following losses of 60,000 in August. Manufacturing: Eliminated 51,000 jobs in September, after cutting 66,000 in August.
Stocks extend recent slide as September job losses rise more than expectedOctober 2nd, 2009 Stocks sink as job losses rise more than expectedNEW YORK — Stocks are tumbling after the government said more jobs were lost in September than expected. The Labor Department says employers cut 263,000 jobs last month, up from 201,000 in August.
Summary Box: Rising pink slips the biggest obstacle to a lasting economic recoveryOctober 2nd, 2009 Summary Box: Another cruel month for jobseekersRISING PINK SLIPS: Employers cut 263,000 jobs in September, after a reduction of 201,000 in August. Even though the economy is in a recovery, companies are still sticking with cost cutting.
Stocks pare early losses as investors see bargains after disappointing jobs reportOctober 2nd, 2009 Stocks pull off lows, fluctuate after jobs dataNEW YORK — Stocks pared early losses and edged lower Friday after a disappointing monthly jobs report brought fresh concerns that a recovery in the troubled labor market may be a long way off. The Labor Department said employers cut 263,000 jobs last month, more than the 201,000 cut in August and worse than the 180,000 economists were expecting.
Unexpectedly steep September job losses send stocks lower, extending market's recent slideOctober 2nd, 2009 Stocks fall as job losses rise more than expectedNEW YORK — Stocks dropped sharply early Friday after the government said more jobs were lost in September than expected. The Labor Department said employers cut 263,000 jobs last month, up from 201,000 in August.
Unexpectedly steep September job losses send stocks lower, extending market's slideOctober 2nd, 2009 Stocks fall as September jobs report disappointsNEW YORK — Stocks fell moderately Friday after the government reported that more jobs were lost in September than expected. The Labor Department said employers cut 263,000 jobs last month, up from 201,000 in August and worse than the 180,000 losses economists were expecting.
Stocks slip after mixed personal income and spending data, disappointing weekly job claimsOctober 1st, 2009 Stocks open lower after jobs, income dataNEW YORK — Stocks retreated in early trading Thursday after two government reports suggested the economy is still poised for a slow recovery. The Labor Department said new claims for jobless benefits rose more than expected to 551,000, evidence that the labor market is struggling and that jobs remain scarce.
Stocks reverse early gains after disappointing reading on consumer confidenceSeptember 30th, 2009 Drop in consumer confidence pulls stocks lowerNEW YORK — Stocks have reversed early gains and are falling on a report showing Americans are still downbeat on the economy. The Conference Board says its consumer confidence index fell to 53.1 in September, down from 54.5 in August, and much lower than the reading of 57 that economists expected.
Stocks waver as market absorbs mixed news on home prices and consumer confidenceSeptember 30th, 2009 Stocks waver on housing, consumer confidence dataNEW YORK — The latest batch of mixed economic data is making it difficult for stocks to take direction. Stocks wavered early Tuesday after the Conference Board said its consumer confidence index fell to 53.1 in September, down from 54.5 in August, and much lower than the reading of 57 that economists had been expecting.
Stocks edge lower, extending weakness, as market shrugs off better economic reportsSeptember 2nd, 2009 Stocks slip; Investors are cautious after tumbleNEW YORK — Stocks edged lower early Wednesday, a day after a big slide, as positive reports on factory orders and jobs did little to ease worries about the economy. A private sector report on unemployment failed to curb unease about job losses, one of the biggest problems facing the economy.
Investors start September on cautious footing, stocks fall after manufacturing, housing dataSeptember 1st, 2009 Stocks fall after manufacturing, housing dataNEW YORK — The stock market's rally finally gave way on Tuesday, sending shares sharply lower as investors concluded that a six-month surge was overdone. At midday, all the major indexes fell more than 1.5 percent, including the Dow Jones industrials, which lost about 150 points.
Stocks open slightly higher after retail sales, weekly unemployment reports, Wal-Mart earningsAugust 13th, 2009 Stocks creep higher after jobs, retail dataNEW YORK — Stocks are pushing moderately higher after a better-than-expected earnings report from Wal-Mart helped to offset disappointing data on jobs and retail sales. Investors are hesitantly adding to Wednesday' big gains, which came after upbeat comments from the Federal Reserve.
Stocks open higher as report says employers cut fewer-than-expected jobs in MayJune 5th, 2009 Stocks jump on better-than-expected jobs reportNEW YORK — Investors are cheering a government report that said employers cut fewer jobs than expected last month. Stocks rallied in the early going Friday after the Labor Department said 345,000 jobs were lost in May, significantly less than the half-million economists had been expecting and the fewest since September.
Brazilian stocks fall in early trading as investors lock in gains from weekslong advanceMay 9th, 2009 Brazilian stocks fall in early tradingMEXICO CITY — Brazilian stocks are falling as investors lock in gains from weeks of large advances. Sao Paulo's Ibovespa index is down 2.3 percent to 50,315 after the first hour of trading on Thursday.
US stocks fall on shrinking economy, disappointing earningsJanuary 30th, 2009 NEW YORK - US stocks fell for a second session Friday morning as US gross domestic product (GDP) fell by the highest rate in 27 years and disappointing earnings added to the uncertainty in the market. The US Commerce Department reported Friday that the GDP, which measures total goods and services output in the country, contracted at a 3.8 percent annual rate, the lowest level since the first quarter of 1982.
Loading ...