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Stocks fade as traders worry about unemployment
Source: Agencies |
September 3, 2009, Thursday
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THE stock market extended its slide yesterday as investors worried that a weak job market will trip up a recovery in the U.S. economy.
Stocks posted modest losses, a day after tumbling on fears about banks and concerns that a six-month rally of more than 50 percent has left the stock market overheated. The Dow Jones industrial average lost another 30 points after skidding 186 points Tuesday.
A private sector report on unemployment gave investors new reason to fret about what is widely seen as the biggest problem facing the economy. The ADP National Employment Report found that employment fell by 298,000 in August following a revised loss of 360,000 jobs in July. The losses were the smallest since September 2008 but more than analysts had expected.
The report shapes expectations for the Labor Department's monthly reading on jobs, which is due Friday. Unemployment has hit consumer spending, which accounts for about 70 percent of U.S. economic activity. Without more help from consumers, the economy will have trouble pulling out of the longest recession since World War II.
"Until Friday's data comes, no one is really making any big bets," said Neil Massa, senior trader at MFC Global Investment Management. "A little profit-taking looks healthy at this point."
Analysts said the market's ability to avoid another steep drop was a good sign but cautioned that trading volume remains light ahead of the Labor Day holiday. Light volume can skew the market's moves and makes it difficult to draw conclusions about investor sentiment.
"We need these periods of backing off," said Darin Newsom, senior analyst at DTN in Omaha, Nebraska. "When there is no news to really spark the interest that we need to take this thing higher, the inclination is to sell off."
Even with stocks down for four straight days, major market indicators have given up less than two week's worth of gains. The Standard & Poor's 500 is still up 47.5 percent since from a 12-year low on March 9.
The Dow fell 29.93, or 0.3 percent, to 9,280.67. The S&P 500 index fell 3.29, or 0.3 percent, to 994.75, while the Nasdaq composite index fell 1.82, or 0.1 percent, to 1,967.07.
Bond prices rose, pushing down yields. The yield on the benchmark 10-year Treasury note fell to 3.30 percent from 3.36 percent late Tuesday.
The dollar was mixed against other major currencies, while gold prices rose.
Light, sweet crude finished unchanged at US$68.05 a barrel on the New York Mercantile Exchange.
In other trading, the Russell 2000 index of smaller companies fell 1.22, or 0.2 percent, to 556.84.
Three stocks fell for every two that rose on the New York Stock Exchange, where volume came to 1.4 billion shares compared with 1.6 billion Tuesday.
Stocks posted modest losses, a day after tumbling on fears about banks and concerns that a six-month rally of more than 50 percent has left the stock market overheated. The Dow Jones industrial average lost another 30 points after skidding 186 points Tuesday.
A private sector report on unemployment gave investors new reason to fret about what is widely seen as the biggest problem facing the economy. The ADP National Employment Report found that employment fell by 298,000 in August following a revised loss of 360,000 jobs in July. The losses were the smallest since September 2008 but more than analysts had expected.
The report shapes expectations for the Labor Department's monthly reading on jobs, which is due Friday. Unemployment has hit consumer spending, which accounts for about 70 percent of U.S. economic activity. Without more help from consumers, the economy will have trouble pulling out of the longest recession since World War II.
"Until Friday's data comes, no one is really making any big bets," said Neil Massa, senior trader at MFC Global Investment Management. "A little profit-taking looks healthy at this point."
Analysts said the market's ability to avoid another steep drop was a good sign but cautioned that trading volume remains light ahead of the Labor Day holiday. Light volume can skew the market's moves and makes it difficult to draw conclusions about investor sentiment.
"We need these periods of backing off," said Darin Newsom, senior analyst at DTN in Omaha, Nebraska. "When there is no news to really spark the interest that we need to take this thing higher, the inclination is to sell off."
Even with stocks down for four straight days, major market indicators have given up less than two week's worth of gains. The Standard & Poor's 500 is still up 47.5 percent since from a 12-year low on March 9.
The Dow fell 29.93, or 0.3 percent, to 9,280.67. The S&P 500 index fell 3.29, or 0.3 percent, to 994.75, while the Nasdaq composite index fell 1.82, or 0.1 percent, to 1,967.07.
Bond prices rose, pushing down yields. The yield on the benchmark 10-year Treasury note fell to 3.30 percent from 3.36 percent late Tuesday.
The dollar was mixed against other major currencies, while gold prices rose.
Light, sweet crude finished unchanged at US$68.05 a barrel on the New York Mercantile Exchange.
In other trading, the Russell 2000 index of smaller companies fell 1.22, or 0.2 percent, to 556.84.
Three stocks fell for every two that rose on the New York Stock Exchange, where volume came to 1.4 billion shares compared with 1.6 billion Tuesday.
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