U.S. stocks off to a weak start after jobs numbers
Enviado: 3/7/2003 15:07CBS MarketWatch
U.S. stocks off to a weak start after jobs numbers
Thursday July 3, 9:49 am ET
By Julie Rannazzisi
NEW YORK (CBS.MW) -- U.S. stock prices fell Thursday after a surprisingly soft report on the job market incited worries about the health of the economy.
The stock market will observe an early 1 p.m. ET close on Thursday ahead of the Independence Day holiday Friday. Bond markets will shutter Thursday at 2 p.m. ET.
All of the market's sectors backpedaled, with the exception of brokerage and gold issues. The heftiest losses were suffered by semiconductor, networking and airline shares.
The Dow Jones Industrial Average (CBOT^DJINews) slid 62 points, or 0.7 percent, to 9,080.
The Nasdaq Composite (NasdaqSC^IXICNews) fell 9 points, or 0.6 percent, to 1,669 and the Nasdaq 100 Index (NasdaqSC^NDXNews) relinquished 7 points, or 0.6 percent, to 1,238.
The Standard & Poor's 500 Index (CBOE^SPXNews) pulled back 0.6 percent while the Russell 2000 Index (CBOE^RUTNews) of small-capitalization stocks erased 0.6 percent.
Volume stood at 85.5 million on the NYSE and at 153 million on the Nasdaq Stock Market. Decliners trounced advancers by 19 to 7 on the NYSE and by 15 to 8 on the Nasdaq.
Inside the jobs data
A total of 30,000 nonfarm jobs were lost last month vs. the milder 3,000 decline that had been the expected. Adding to the weak tone, May's payroll loss was revised to 70,000 from the 17,000 that had first been reported.
Additionally, the unemployment rate shot up to a nine-year-high 6.4 percent in June compared with May's 6.1 percent, higher than the 6.2 percent reading that had been expected by economists.
"[This is] clearly going to be viewed badly by the market, which is looking for economic data to support its performance gains of the first half of the year. Payrolls are not, and are unlikely to be for a while, the source of strength the market is looking for," said mat Johnson, economist at Quantit Economic Group.
Another gauge of the job market came in weaker-than-expected. Weekly initial claims swelled 21,000 to 430,000, though the more reliable four-week average fell to its lowest level since early April.
Still ahead on the data docket is the release of the Institute of Supply Management's services index for June.
Siebel rises in face of warning; AT&T down
Siebel Systems (NasdaqNMSEBLNews) jumped 2 percent even after issuing a revenue warning for the second quarter, citing purchasing delays by customers.
AT&T traded down 1.7 percent after Standard & Poor's lowered the Dow stock's (NYSETNews) long-term corporate credit debt rating to "BBB" from "BBB+" late Wednesday. The rating agency's move reflects the continued challenges faced by the telecom giant due to competitive pricing pressures and the slow economic recovery.
Market maker Knight Trading Group (NasdaqNMNITENews) surged 17.8 percent after upping its second-quarter profit target thanks to increased trading volume and momentum.
Treasurys pare losses after data
Government bonds erased the bulk of the steep losses suffered early on after the surprisingly weak jobs numbers.
In the latest trades, the 10-year Treasury note was down 3/32 to yield (CBOE^TNXNews) 3.55 percent while the 30-year government bond eased 9/32 to yield (CBOE^TYXNews) 4.60 percent.
In the currency sector, the U.S. dollar mounted a rapid about-face following the release of the morning's economic numbers. The greenback slipped 0.1 percent to 118.10 yen while the euro added 0.1 percent to $1.1536.
David Powers, Merrill Lynch's chief global investment strategist, upgraded Japanese equities in his global portfolio to "neutral" from "underweight," calling the surge in Japan's bond yields over the past two weeks "hard to ignore."
Additionally, the strategist pointed to the latest quarterly "tankan survey" on business confidence, which came in stronger than expected earlier in the week, suggesting an improved outlook for capital spending. The Nikkei Average ended at a 10-month high on Thursday.
Tony Crescenzi, chief bond market strategist at Miller, Tabak & Co., said the surge in global bond yields over the past three weeks points to expectations for a stronger economy down the road. The rise in Japanese bond yields has been especially pronounced over the past three weeks, swelling from a low of 0.44 percent in mid-June to the current 1.13 percent.
U.S. stocks off to a weak start after jobs numbers
Thursday July 3, 9:49 am ET
By Julie Rannazzisi
NEW YORK (CBS.MW) -- U.S. stock prices fell Thursday after a surprisingly soft report on the job market incited worries about the health of the economy.
The stock market will observe an early 1 p.m. ET close on Thursday ahead of the Independence Day holiday Friday. Bond markets will shutter Thursday at 2 p.m. ET.
All of the market's sectors backpedaled, with the exception of brokerage and gold issues. The heftiest losses were suffered by semiconductor, networking and airline shares.
The Dow Jones Industrial Average (CBOT^DJINews) slid 62 points, or 0.7 percent, to 9,080.
The Nasdaq Composite (NasdaqSC^IXICNews) fell 9 points, or 0.6 percent, to 1,669 and the Nasdaq 100 Index (NasdaqSC^NDXNews) relinquished 7 points, or 0.6 percent, to 1,238.
The Standard & Poor's 500 Index (CBOE^SPXNews) pulled back 0.6 percent while the Russell 2000 Index (CBOE^RUTNews) of small-capitalization stocks erased 0.6 percent.
Volume stood at 85.5 million on the NYSE and at 153 million on the Nasdaq Stock Market. Decliners trounced advancers by 19 to 7 on the NYSE and by 15 to 8 on the Nasdaq.
Inside the jobs data
A total of 30,000 nonfarm jobs were lost last month vs. the milder 3,000 decline that had been the expected. Adding to the weak tone, May's payroll loss was revised to 70,000 from the 17,000 that had first been reported.
Additionally, the unemployment rate shot up to a nine-year-high 6.4 percent in June compared with May's 6.1 percent, higher than the 6.2 percent reading that had been expected by economists.
"[This is] clearly going to be viewed badly by the market, which is looking for economic data to support its performance gains of the first half of the year. Payrolls are not, and are unlikely to be for a while, the source of strength the market is looking for," said mat Johnson, economist at Quantit Economic Group.
Another gauge of the job market came in weaker-than-expected. Weekly initial claims swelled 21,000 to 430,000, though the more reliable four-week average fell to its lowest level since early April.
Still ahead on the data docket is the release of the Institute of Supply Management's services index for June.
Siebel rises in face of warning; AT&T down
Siebel Systems (NasdaqNMSEBLNews) jumped 2 percent even after issuing a revenue warning for the second quarter, citing purchasing delays by customers.
AT&T traded down 1.7 percent after Standard & Poor's lowered the Dow stock's (NYSETNews) long-term corporate credit debt rating to "BBB" from "BBB+" late Wednesday. The rating agency's move reflects the continued challenges faced by the telecom giant due to competitive pricing pressures and the slow economic recovery.
Market maker Knight Trading Group (NasdaqNMNITENews) surged 17.8 percent after upping its second-quarter profit target thanks to increased trading volume and momentum.
Treasurys pare losses after data
Government bonds erased the bulk of the steep losses suffered early on after the surprisingly weak jobs numbers.
In the latest trades, the 10-year Treasury note was down 3/32 to yield (CBOE^TNXNews) 3.55 percent while the 30-year government bond eased 9/32 to yield (CBOE^TYXNews) 4.60 percent.
In the currency sector, the U.S. dollar mounted a rapid about-face following the release of the morning's economic numbers. The greenback slipped 0.1 percent to 118.10 yen while the euro added 0.1 percent to $1.1536.
David Powers, Merrill Lynch's chief global investment strategist, upgraded Japanese equities in his global portfolio to "neutral" from "underweight," calling the surge in Japan's bond yields over the past two weeks "hard to ignore."
Additionally, the strategist pointed to the latest quarterly "tankan survey" on business confidence, which came in stronger than expected earlier in the week, suggesting an improved outlook for capital spending. The Nikkei Average ended at a 10-month high on Thursday.
Tony Crescenzi, chief bond market strategist at Miller, Tabak & Co., said the surge in global bond yields over the past three weeks points to expectations for a stronger economy down the road. The rise in Japanese bond yields has been especially pronounced over the past three weeks, swelling from a low of 0.44 percent in mid-June to the current 1.13 percent.