Stocks edge lower a day after wild ride; Strong jobs report brings some stabilityBy Stephen Bernard, AP
Friday, May 7, 2010
Stocks slip after wild day, Europe woes linger
NEW YORK — Turbulence is continuing in the stock market, a day after some of the most volatile trading in history.
Traders are looking past a surprisingly strong report on the U.S. jobs market, focusing instead on Europe’s spreading debt crisis and Thursday’s brief plunge of nearly 1,000 points in the Dow Jones industrials.
Stock prices were fluctuating sharply, paring some of their earlier losses.
In midday trading the Dow was off 67.71, or 0.6 percent, to 10,452.61.
The Standard & Poor’s 500 index fell 9.28, or 0.8 percent, to 1,118.87, while the Nasdaq composite fell 30.39, or 1.3 percent, to 2,289.25.
Falling stocks outpaced gainers by about three to one on the New York Stock Exchange, where volume was a heavy 1 billion shares.
THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP’s earlier story is below.
NEW YORK (AP) — Turbulence continued in the stock market Friday, a day after some of the most volatile trading in history.
Traders looked past a surprisingly strong report on the U.S. jobs market and focused instead on Europe’s spreading debt crisis and Thursday’s plunge. The Dow Jones industrial average was down nearly 1,000 points Thursday afternoon — its largest one-day drop — before recovering most of its losses.
Stock prices were fluctuating sharply, as they often do the day after a big slide. The Dow was off about 45 points in late morning trading Friday, paring much of its earlier losses. Traders remained anxious after questions remained about what caused Thursday’s sudden drop, which sent the stocks of several companies briefly to zero.
Technology stocks were particularly hard hit following reports that Nokia Corp. was broadening its legal fight against rival cell phone maker Apple Inc. to include the iPad, Apple’s hit new product. Apple shares fell 2.6 percent in heavy trading.
Meanwhile Europe’s debt woes continued to weigh on stocks. Germany’s parliament approved Berlin’s share of the rescue package after a boisterous debate. However investors still fear that Greece may not make a May 19 deadline to make a debt repayment.
Investors’ concern goes far beyond the debt problems in Greece, the smallest economy in the European Union. A further loss of confidence in European government debt could have an impact on other weak countries like Portugal, potentially requiring another difficult bailout process. The debt crisis has already badly undermined Europe’s shared currency, the euro.
“You’re not concerned about the kid with the cold, but how he spreads it to the rest of the class,” said Len Blum, a managing partner at investment bank Westwood Capital. Blum noted that Greece’s debt problem could be similar to the subprime mortgage meltdown in the U.S., which quickly spread to other parts of the financial system.
In late morning trading, the Dow fell 44.74, or 0.4 percent, to 10,475.58. It had been down more than 200 points in morning trading before recouping much of its losses.
The broader Standard & Poor’s 500 index fell 4.21, or 0.4 percent, to 1,123.94, while the Nasdaq composite fell 20.77, or 0.9 percent, to 2,298.87.
Falling stocks outpaced gaining ones by about five to two on the New York Stock Exchange, where volume was 860 million shares.
Friday’s drop left the Dow down about 5 percent for the week and barely in the black for the year. The S&P was also down about 5 percent, while the Nasdaq was off 7 percent. The S&P and Nasdaq were also both still positive for 2010.
In economic news, the Labor Department reported that employers added 290,000 jobs last month, far more than expected and the biggest jump in four years. However the jobless rate rose to 9.9 percent from 9.7 percent as more people looked for work.
The big improvement in the jobs report brought some clarity to the biggest question remaining for the U.S. economy: When employers would start hiring again. Despite positive signs in manufacturing and housing, job creation has been lagging far behind other sectors of the economy, a worrisome point for economists. Friday’s report may help change that perception.
“It’s a good-size number and it had a lot of breadth,” said John Silvia, chief economist at Wells Fargo. “There isn’t a double-dip out there. The employment situation suggests that we have a sustained economic recovery in the U.S. Companies are hiring people.”
Apple fell $6.51 or 2.6 percent to $239.74.
Oil fell, and gold rose. The dollar edged higher against most currencies, but the euro clawed back some ground against the dollar after several days of declines.
European markets were broadly lower.
The declines were deepest in France, where the CAC-40 index tumbled 5 percent. Germany’s DAX fell 1.8 percent and Britain’s FTSE 100 fell 1.2 percent. Japan’s Nikkei fell 3.1 percent.
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