Closing Market Report

Star-Bulletin news services

Thursday, March 6, 2003

Stocks fall
on jobless jump

By Hope Yen
Associated Press

NEW YORK >> Discouraging news on jobless claims battered Wall Street today, sending stocks lower for the third day in four as investors already nervous about war found little reason to buy. The Dow Jones industrials lost more than 100 points.

"The economic news of the past several weeks paints the same picture -- the economy has moved off its bottom but it's still sluggish," said Russ Koesterich, U.S. equity strategist at State Street Corp. in Boston.

"The market is looking for corporate revenue to increase. ... But there's no evidence of that occuring yet," he said.

By mid-afternoon, the Dow was down 100.40, or 1.3 percent, at 7,675.20. The loss more than erased blue chips' 70-point gain yesterday.

The broader market was also lower. The Nasdaq composite index fell 11.39, or 0.9 percent, to 1,303.01. The Standard & Poor's 500 index dropped 8.27, or 1 percent, to 821.58. The Russell 2000 index fell 2.59, or 0.7 percent, to 353.95.

The price of the Treasury's 10-year note was down 1/8 point this afternoon, while its yield rose to 3.65 percent from 3.63 percent late yesterday. Two-year Treasury notes were down 1/32 point and yielded 1.44 percent, up from 1.43 percent yesterday.

The Labor Department reported today that new claims for unemployment benefits rose last week by a seasonally adjusted 12,000 to 430,000, their highest level of the year. It marked the third week in a row that layoffs increased; analysts were expecting claims to decrease.

In a separate report, however, the department said productivity rose at an annual rate of 0.8 percent in the fourth quarter, according to revised figures. That marked a turnaround from the 0.2 percent rate of decline reported a month ago.

And a third report from the Commerce Department showed orders to U.S. factories rose 2.1 percent in January, the best showing in six months, and up from a 0.3 percent increase in December.

The mixed economic news weighed on a hesitant market worried about growing tensions with Iraq and North Korea.

Concerns about overseas tensions have led to choppy trading in recent weeks as investors make short-term bets on when or whether there will be a war. Analysts say a protracted military conflict could weaken the already-fragile economic recovery.

"The biggest problem right now is the market has this huge risk hanging over it," Koesterich said. "The quicker it's resolved, whether by military action or a compromise, the better it will be for the market."

Retailers also took a hit after several reported disappointing sales in February, citing war worries and the severe winter weather in the Northeast. Sears slid 70 cents to $19.30, while Wal-Mart fell 13 cents to $47.75.

Tyson Foods dropped 74 cents to $7.79 after it lowered its second-quarter earnings outlook.

Gainers included Circuit City, which rose 8 cents to $4.41 after the retailer raised its fiscal fourth-quarter profit outlook.

Overseas, Japan's Nikkei stock average finished 1.2 percent lower. In Europe, France's CAC-40 fell 0.8 percent, Britain's FTSE 100 dropped 0.2 percent and Germany's DAX index lost 2.2 percent.

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