Economic concerns extend sharp losses
NEW YORK » Wall Street wrestled with intensifying economic worries yesterday, extending sharp losses after a disheartening jobs report and then grudgingly engaging in some mild bargain hunting that gave the market some modest gains.
The major indexes ended the week with big declines, a sign that investors, who not long ago expected the economy to improve, are now growing increasingly discouraged.
Stocks initially fell after the U.S. Labor Department reported that payrolls shrank more than predicted last month and that the unemployment rate reached a five-year high. But stocks that had been pounded lower, including a huge drop on Thursday, were suddenly more attractive to investors willing to make some bets.
The government said payrolls shrank by 84,000 last month, more than the 75,000 economists predicted, and higher than the 51,000 jobs lost in July. The unemployment rate rose to a five-year high of 6.1 percent from 5.7 percent.
The nation has lost nearly 550,000 jobs so far this year, eroding investors' hopes for a late-year recovery.
But investors, with little conviction but willing to make a few bets, snapped up some of the stocks hit in a sell-off Thursday, particularly banks and insurers. That lifted the market off its lows, but it was hardly a solid advance.
The Dow Jones industrial average rose 32.73, or 0.29 percent, to 11,220.96; the blue chips had been down 150 points at their lows of the session.
The Standard & Poor's 500 index rose 5.48, or 0.44 percent, to 1,242.31, and the Nasdaq composite index fell 3.16, or 0.14 percent, to 2,255.88.
Yesterday's moves follow a dismal performance on Thursday in which all three major indexes moved back into bear market territory, defined as a 20 percent drop from a recent peak. The Dow plunged more than 340 points in a selloff underpinned by disappointing economic news and lackluster sales reports from retailers; the news drove home to investors that the economy was more troubled than many had thought.
For the week, the Dow lost 2.8 percent, its fourth straight week of losses and the biggest drop since late June. The S&P 500 gave up 3.2 percent and the technology-heavy Nasdaq, home to many stocks seen as riskier than the blue chips, fell 4.7 percent.
Bond prices fell yesterday. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.66 percent from 3.62 percent late Thursday.
Advancing issues narrowly outnumbered decliners on the New York Stock Exchange, where volume came to 1.2 billion shares compared with 1.3 billion shares traded Thursday.
The Russell 2000 index of smaller companies rose 0.23, or 0.03 percent, to 718.85.
Crude dropped to nearly $105 a barrel in yesterday's session as the dollar continued to gain on the euro and investors waited to see whether OPEC would move to restrict output next week following a two-month plunge in prices.
Light, sweet crude settled down $1.66 to $106.23 a barrel on the New York Mercantile Exchange.
Among financials carving out advances, Citigroup Inc. rose 77 cents, or 4.2 percent, to $19.07, while Bank of America Corp. rose $1.63, or 5.3 percent, to $32.23. Wachovia Corp. rose $1.22, or 7.9 percent, to $16.75.
Energy names slipped. Chevron Corp. declined $1 to $80.22, while ConocoPhillips fell $1.05 to $75.43.