Still Falling
Despite a not-so-bad batch of September employment numbers, stocks staged a
broad-based selloff that left the Nasdaq down 3.2%, the Dow off 1.2%, and the
S&P 500 down 1.9%. Stocks bounced off their lows of the day in the final
half hour of trading, but that failed to help much as nearly every sector
finished in the red.
Non-farm payrolls rose 252,000 while analysts had expected just 230,000. Adjusting for census workers and striking workers, the net increase was just
204,000.Â
Average hourly wages rose 0.2%, which was lower than the 0.3% increase analysts expected, and the unemployment level fell to 3.9%, while estimates
looked for it to remain flat at 4.1%.
Volume was about even with Thursday’s level, as 1.85 billion shares traded on
the Nasdaq and 1.14 billion shares traded on the NYSE.
“The market looks a little bit like Alice In Wonderland. Good news is
bad news, and bad news is bad news. The employment data today looked good, but
nonetheless, many traders fear that the Fed may move to increase interest rates
as a result of the low unemployment number,” said Alan Ackerman, Executive
Vice President and Market Strategist, Fahnestock & Co.
“The market generally remains nasty and negative. Sentiment is sour, and
many portfolios are being purged of problem stocks. There may be more
disappointments ahead as we enter the earnings season full bore,” he added.
According to preliminary numbers, the Nasdaq sank 111.03 to 3361.07, the Dow
fell 128.38 to 10,596.54, and the S&P 500 slid 27.37 to 1408.91.
Techs that avoided the selloff included Agile Software
(
AGIL |
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to 73 7/8, Tibco Software
(
TBX |
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PowerRating), up 5 1/8 to 71 1/4, andÂ
Worst-performing sectors were banks
(
$BKX.X |
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(
$BTK.X |
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(
$SOX.X |
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PowerRating), down 4.0%, Internets
(
$GIN.X |
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PowerRating), down 4.3%, and broker/dealers
(
$XBD.X |
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PowerRating), down 5.1%.
Rumors that a major brokerage house had taken big trading losses weighed on
the broker/dealers as weakness hit Morgan Stanley Dean Witter
(
MWD |
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8.9%, Schwab
(
SCH |
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PowerRating), down 8.4%, Merrill Lynch
(
MER |
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PowerRating), down 7.4%, and Bear
Stearns
(
BSC |
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PowerRating), down 7.2%.
Top Dow gainers were IBM
(
IBM |
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PowerRating), up 2.4%, Alcoa
(
AA |
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PowerRating), up 1.4%, and
Procter & Gamble
(
PG |
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PowerRating), up 1.3%.
Dow losers were American Express
(
AXP |
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PowerRating), down 4.9%, Home Depot
(
HD |
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PowerRating),
down 5.1%, and AT&T
(
T |
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PowerRating), down 5.4%. AT&T was the recipient of a
downgrade from Salomon Smith Barney.
Looking ahead, Monday could see lighter trading volume since banks and the
bond market are closed for Columbus Day.