[Home] [Headlines] [Latest Articles] [Latest Comments] [Post] [Mail] [Sign-in] [Setup] [Help] [Register]
|
Status: Not Logged In; Sign In
Economy Title: Stocks dive after dismal June jobs report Stock indexes fell sharply Friday, erasing most of the week's gains, after a dismal report on the job market stifled hopes for a quick economic rebound. U.S. employers created only 18,000 net jobs in June, the fewest in nine months and a fraction of what many economists expected. Private companies added jobs at the slowest pace in more than a year. The unemployment rate edged up to 9.2 percent, its highest level this year. A broader measure of weakness in the labor market was even worse. Among Americans who want to work, 16.2 percent are either unemployed or unable to find full-time jobs. That was up from 15.8 percent in May. The Standard & Poor's 500 index dropped 15 points in afternoon trading, or 1.1 percent, to 1,338. That eliminated the index's gains from Thursday and left it down for the week. The Dow Jones industrial average fell 108, or 0.8 percent, to 12,611. Prior to Friday the Dow had only one down day over the past eight. The Nasdaq composite index fell 31, or 1.1 percent, to 2,842. That index is on track for its first daily loss in two weeks. Stocks fell broadly. All 10 industry groups in the S&P 500 index fell. Job- hunting service Monster Worldwide Inc. plunged 5 percent, one of the worst declines of any stock in the index. Manufacturers had the worst declines in the Dow average. Heavy-equipment maker Caterpillar Corp., industrial conglomerate General Electric Co. and networking equipment maker Cisco Systems Inc. each lost 2 percent. So did Bank of America Corp. Hiring slumped in May due partly to high fuel prices and disruptions of industrial supplies because of the earthquake and tsunami disasters in Japan. Those problems now appear to be more persistent than many analysts had expected. "There's just a lot more evidence than before that we're in an extended weak patch," said Brian Gendreau, market strategist for Cetera Financial Group. He said private economists will likely reduce their projections for overall economic growth this year. Traders rushed to the relative safety of government bonds. The yield on the 10-year Treasury note fell to 3.02 percent from 3.19 percent just before the jobs report came out. Bond yields fall when demand for them increases. Oil prices fell 3 percent. The lack of hiring suggests that demand for fuel will increase less than traders had expected. Lower fuel prices could eventually help the economy by leaving consumers with more money to spend on things other than gas. Weak economic data this spring pushed stocks near their lowest levels of the year two weeks ago. Markets recovered last week, giving the Dow its best week in two years, on signals that the economy was rebounding. Stock indexes closed near their 2011 highs on Thursday. It now appears that those peaks, reached on April 29, will stand for the time being. Thursday's gains were driven by a report from payroll processor ADP that private companies added 157,000 jobs in June. That raised investors' expectations that the broader Labor Department report, which has a greater influence on markets, would also indicate a pickup in hiring. The ADP report is sometimes, but not always, a reliable indicator of how the Labor Department's report will turn out. "The market was just coming to the conclusion that this weak patch was coming to an end," Gendreau said. Noting that the government revised downward its jobs numbers for April and May, Gendreau said the report might signal a longer-term negative trend. Despite the weak job market, analysts still expect earnings at big U.S. companies to be strong. Corporate America is benefiting from strong export growth as the weak dollar makes American goods cheaper, and therefore more competitive, in overseas markets. Aluminum maker Alcoa Inc., one of the 30 companies in the Dow average, will be the first major corporation to report second-quarter financial results on Monday. With the economic picture so bleak, traders might not react that much even if U.S. companies report higher earnings, Gendreau said. "This will be one quarter in which earnings don't really drive the market," he said. "The corporate sector is strong, but of course it looked strong at the peak in 2007, as well." Rupert Murdoch's media conglomerate News Corp. fell 4 percent as a phone- hacking scandal at its News of the World tabloid deepened. A former editor of the paper who later served as spokesman for British Prime Minister David Cameron was arrested Friday. News Corp. shuttered the 168-year old paper on Thursday in hopes of saving its deal to take over the lucrative British satellite TV company British Sky Broadcasting. Government approval of that deal will now be delayed because of the crisis, which has shocked Britain.
Poster Comment: Gold is up.
Post Comment Private Reply Ignore Thread Top • Page Up • Full Thread • Page Down • Bottom/Latest Begin Trace Mode for Comment # 5.
#5. To: hondo68 (#0)
The administration is pretending unemployment won't be a decisive factor in next years election cycle. They must be smoking some very good marijuana these days...
There are no replies to Comment # 5. End Trace Mode for Comment # 5.
Top • Page Up • Full Thread • Page Down • Bottom/Latest |
|
[Home] [Headlines] [Latest Articles] [Latest Comments] [Post] [Mail] [Sign-in] [Setup] [Help] [Register]
|