por admin » Vie Jun 04, 2010 12:55 pm
TODAY'S MARKETSJUNE 4, 2010, 1:44 P.M. ET
Dow Industrials Flirt With 10000
By KRISTINA PETERSON And PETER A. MCKAY
NEW YORK—U.S. blue-chip stocks traded around the 10000 level Friday as disappointing U.S. job growth and renewed worries about the eurozone sent investors scurrying toward safer assets.
The Dow Jones Industrial Average slipped under 10000 after the euro fell below $1.20 around midday, and continued to bounce around that level in choppy trading. Most recently it was down 245 points, or 2.4%, at 10011. The Dow had previously dipped below 10000 last week before climbing back.
All 30 of its components were lower, including declines of more than 4% each in economically sensitive stocks Caterpillar, General Electric and American Express.
The Nasdaq Composite fell 2.5% and the Standard & Poor's 500-stock index was off 2.4%. All of its components traded lower, led by a 3.8% slide in the industrial category, which tends to suffer whenever investors are worried about global growth. A rising dollar, boosted by fresh four-year lows in the euro, also weighed on the sector.
Markets expecting a robust U.S. jobs report were left wanting. The data came as concerns swirled once again about Europe's crisis, with the spotlight this time on Hungary's economy. A leading official in the ruling Fidesz party said on Thursday that Hungary faces a Greek-like sovereign-debt problem.
"Today you got a postcard from Hungary - all is not well, send money. It's a reminder that the debt issues are still there and they're serious and significant," said Karl Mills, manager at Counterpoint Select Fund.
Associated Press
Adding to the euro zone worries, the key monthly jobs report fell far short of expectations.
While the U.S. Labor Department's latest employment data showed the U.S. economy added jobs in May at the fastest pace in a decade, the gains were inflated by temporary government hiring for the 2010 Census and weren't enough to bring unemployment down significantly. Nonfarm payrolls rose by 431,000 last month, short of economists' expectations for a rise of 515,000 jobs, according to a Dow Jones Newswires poll.
Only 41,000 private-sector jobs were added. The unemployment rate slipped to 9.7% in May from 9.9% the previous month, which was in line with economists' expectations.
"The jobs report was underwhelming relative to where the expectation were," Mills said.
Investors, brokerages and exchanges braced for a day-long bout of volatility early in the session. But what has emerged since is a fairly steady selloff on so-so volume. After nearly four hours of trading, 3.1 billion shares had traded hands in New York Stock Exchange Composite volume.
The euro zone sovereign-debt crisis resurfaced amid concerns over Hungary's economy. Though Hungary doesn't use the euro, it is a member of the 27-nation European Union, making it an important regional trading partner to countries that do use the common currency.
On Friday, Hungary moved to reassure investors, with the prime minister's spokesman, Peter Szijjarto, saying the government won't let the country's economy go down the same path as Greece. Still, the euro fell to four-year lows, while the U.S. Dollar Index, reflecting the U.S. currency against a basket of six others, climbed 1%.
The dollar's gains weighed on oil and other commodities. Metals futures slid, while crude-oil prices tumbled to just above $72 a barrel.
The cost of insuring Hungarian sovereign debt against default rose to its highest level since July 2009 Friday. Meanwhile, the benchmark 10-year Treasury note jumped, pushing yield down to yield 3.21%.
The Treasury market "will have a bid for the rest of the day," said Tom Tucci, head of government bond trading at RBC Capital Markets in New York.
After the weaker than expected payrolls report, and given ongoing concerns about euro zone debt and banks, "no one will want to sell [Treasurys] going into the weekend."