Wild ride on Wall Street
Disappointing US job growth figures left stocks mixed after a volatile session today, with investors guessing whether the underlying economy was strong enough to warrant current share prices.
But perhaps the biggest news of the day was Martha Stewart.
After the founder of Martha Stewart Living Omnimedia Inc was found guilty, the company’s stock plunged 3.17, or 23%, to close at 10.86, the biggest percentage loser on the New York Stock Exchange for the session.
The Dow Jones industrial average advanced 7.55, or 0.1%, to 10,595.55.
Broader stock indicators were narrowly mixed. The Standard & Poor’s 500 index gained 1.98, or 0.2%, to close at 1,156.86, and the Nasdaq composite index was down 7.48, or 0.4%, at 2,047.63.
Despite the day’s volatility, the markets ended the week with small gains, continuing a lacklustre trend which has stalled Wall Street’s 11-month rally. For the week, the Dow gained 0.1%, the S&P 500 rose 1% and the Nasdaq was up 0.9%. It was the second straight week of gains for the S&P, while the Dow and Nasdaq reversed last week’s downward trend.
The session began after the Labour Department reported that the US jobs had risen by just 21,000 for February, far short of the 125,000 growth economists expected. In addition, the January figure was revised from 112,000 to 97,000, and the unemployment rate remained stalled at 5.6% in February.
The Dow immediately plunged more than 60 points in the first minutes of trading. But a second look at the overall economy prompted buying, particularly in defensive sectors such as finance and healthcare, and sent the major indexes seesawing in a broad range throughout the morning.
“I think you have investors taking heart that the jobs figures means that the Federal Reserve will leave interest rates intact for longer,” said Jack Caffrey, equities strategist at JP Morgan Private Bank. “People are more inclined to seize on that theory than on the lack of jobs in the economy.”
Dow component Intel cut its first-quarter sales forecast late on Thursday, blaming a seasonal sales slump and its transition to new products. The stock dropped 70 cents to 28.95.
With the technology sector having led much of the 2003 rally, the reduced outlook from this bellwether does not bode well for a sustained market rally any time soon, said Bill Groenveld, head trader at vFinance Investments.
Sun Microsystems lost 36 cents to 4.80 after Standard & Poor’s cut the company’s bond rating to junk status.
McDonald’s, which reported a sales jump of 22.6% in February, was up 1.04 at 29.88.
The Food and Drug Administration approved Boston Scientific’s new coronary stent system, but the company’s shares lost 62 cents to 43.50.
Advancing issues outnumbered decliners by a 9-to-5 ratio on the New York Stock Exchange, where volume was moderate.
The Russell 2000 index of smaller companies rose 1.16, or 0.2%, to 599.54.
