Stocks fall but end off lows after disappointing jobs report for September;
Dow slips 22
- By Sara Lepro and Tim Paradis, AP Business Writers
- On Friday October 2, 2009, 6:18 pm EDT
- Buzz up! 6
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Print<http://finance.yahoo.com/news/Stocks-fall-following-apf-2398865446.html/print?x=0>
NEW YORK (AP) -- Investors retreated further from stocks Friday as the pile
of disappointing economic reports grew larger.
[image: AP - Traders work on the floor of the New York Stock Exchange,
Friday, Oct. 2, 2009, in New York. ...]
AP - Traders work on the floor of the New York Stock Exchange, Friday, Oct.
2, 2009, in New York. ...
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.
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