Job fears halts Dow's momentum
Stocks fell on Wall Street yesterday after the government reported that US employers added the fewest jobs in nine months in March and more people gave up looking for work.
The Dow Jones industrial average ended 40.86 points lower at 14,565.25, a loss of 0.3%. The index was down as much as 171 points in the early going. It rose gradually throughout the day to reclaim much of its early loss.
US employers added just 88,000 jobs in March, according to the Labour Department’s monthly survey.
That is half the pace of the previous six months. The report was far worse than economists had forecast and a disappointment for investors following positive signs on housing and the job market over the winter.
The survey, one of the most closely watched indicators of the economy, dented investors’ confidence that the US was poised for a sustained recovery.
The stock market has surged this year, pushing the Dow to another record high close on Tuesday. The index is still up 11.2% this year.
“Things are still looking decent, but there’s no doubt that this was a bit of a disappointment,” said Brad Sorensen, Charles Schwab’s director of market and sector research. “We’re watching to see: is this the start of another soft patch?”
In other trading, the Standard & Poor’s 500 index fell 6.70 points, or 0.4%, to 1,553.28. The index logged its worst week of the year, falling 1%.
Technology stocks fell the most of the 10 industry groups in the index, dropping 1%.
Investors were reducing their exposure to risk. The utilities and telecommunications industries bucked the downward trend in the market, as both rose 0.4%.
The rich dividends and stable earnings provided by those companies make them attractive to investors who want to play it safe.
Natural gas companies were among the best performers on the S&P 500 as the price of the fuel rose 4.5% on concerns about supplies. The price of the fuel has risen 21% since the start of the year.
Investors will shift their focus to earnings reports next week.
Alcoa, the first company in the Dow index to report earnings, will release its first-quarter financial results after the markets close on Monday.
Analysts expect profits for S&P 500 companies to rise 0.6% in the first quarter compared with the same period a year earlier, according to S&P Capital IQ.
That compares with an increase of 7.7% in the fourth quarter of 2012.
