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Stocks fall sharply on weak job figures Original Source Link: (May no longer be active)
http://www.forbes.com/home/feeds/ap/2004/08/06/ap1495039.htmlhttp://www.forbes.com/home/feeds/ap/2004/08/06/ap1495039.html
Associated Press
Stocks Fall Sharply on Weak Job Figures
08.06.2004, 02:40 PM
Investors sold off stocks Friday, sending prices sharply lower, as the market flinched at a new report showing the economy created far fewer jobs in July than had been expected.
In afternoon trading, the Dow Jones industrial average was down 116.22, or 1.2 percent, at 9,846.81.
Broader stock indicators also fell. The Standard & Poor's 500 index was down 12.05, or 1.1 percent, at 1,068.65, and the Nasdaq composite index was down 29.79, or 1.6 percent, at 1,791.84.
Payroll figures released early Friday showed employers added just 32,000 jobs last month, data low enough to warrant worries that a slowing in the economy in June may have been more just a brief pause.
The July job report reflects the weakest increase in hiring since December and comes after a revised gain of just 78,000 in June, even less than previously reported. Economists had forecast the creation of roughly 243,000 jobs for July.
Analysts said the weak employment data was seeding doubts among investors about the overall strength of the economy, and raising new doubts about what the Federal Reserve board of governors will do next week when it meets to discuss interest rates. The Fed had widely been expected to raise rates.
The job figures "were a big surprise and they clearly rocked the market," said Hugh Johnson, chief investment officer at First Albany Corp. "Now the debate will be intense about what they (the Fed) will do next week at their meeting, very intense. It creates just enough uncertainty."
The questions about what the policymakers might do was reflected by a surge in demand for bonds, briefly pushing the interest rate on the benchmark 10-year note as low as 4.17 percent, a level not seen since the spring. Bond yields move in the opposite direction of their price.
The dismal jobs report comes as Wall Street finishes what had already been a terrible week, with stocks falling to new lows for the year because of concerns about very high oil prices.
Stocks closed much lower Thursday, after oil prices surged again to more than $44 a barrel. The Dow lost 163.48, or 1.6 percent, to close at 9,963.03, the second largest decline of the year and the third time it has closed below 10,000 in the last 10 sessions.
The S&P settled at its lowest level since December, losing 1.6 percent, to 1,080.70, and the Nasdaq dropped 1.8 percent to 1,821.63.
The declines continued Friday. Decliners included Halliburton Co., which faces accusations of accounting fraud in a new lawsuit brought by investors. The company's shares fell 45 cents to $29.66.
Shares of General Motors also fell, down 69 cents to $41.85, following the company's announcement Thursday that it was recalling all Saturn Vue sport utility vehicles manufactured since 2001.
Stock in newspaper publisher Belo Corp. also fell, down $1.72 to $21.49, after the company reported that its Dallas Morning News had overstated its circulation.
Reflecting the uncertainty in the job market, Labor Ready Inc., which recruits and provides day laborers, saw its shares fall 72 cents to $12.16.
Declining issues outnumbered advancers 5-to-3 on the New York Stock Exchange, where volume came to 955.64 million shares, up from 844.21 million shares traded at the same point Thursday.
The Russell 2000 index of smaller companies fell 9.49, or 1.8 percent, to 522.87.
Overseas, Japan's Nikkei stock average fell 0.8 percent. In Europe, Britain's FTSE 100 closed down 1.7 percent and France's CAC-40 finished down 2.6 percent. Germany's DAX index was down 2.7 percent in afternoon trading.
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