April 3rd, 2009
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| Article by:
By Alexandra Twin
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NEW YORK -- Stocks tumbled Friday morning after a wretched March jobs report gave investors a reason to step back at the end of another up week on Wall Street.
The Dow Jones industrial average (INDU) lost 70 points, or 0.9%, around 90 minutes into the session. The S&P 500 (SPX) index lost 6 points, or 0.8%. The Nasdaq composite (COMP) lost 7 points, or 0.4%.
Stocks rallied Thursday, extending the market's recent run that has seen the S&P 500 index jump 23% since hitting 12-year lows on March 9.
The stock market has been rising on hopes that the worst has happened and that some of the government's attempts to help the financial sector and economy will work. But employment is a lagging economic indicator and is usually the last to recover.
Jobs report: Employers cut 663,000 jobs from their payrolls in March, after cutting a revised 651,000 in the prior month. Economists surveyed by Briefing.com expected 650,000 job cuts.
The unemployment rate, generated by a separate survey, rose to 8.5% from 8.1% in February, in line with estimates. (Full story)
In other economic news, the Institute for Supply Management released its services sector index for March. The index fell to 40.8 from 41.6 in the previous month. Economists thought it would rise to 42.
Federal Reserve Chairman Ben Bernanke speaks Friday afternoon about the Fed's balance sheet at a symposium in North Carolina.
Company news: IBM (IBM, Fortune 500) and Sun Microsystems (JAVA, Fortune 500) are in the final stages of negotiations of a deal in which IBM would pay $9.55 per share for Sun Microsystems, according to The Wall Street Journal. The report indicated the deal is priced at roughly $1 per share less than Sun Microsystems expected, but the offer is still above the prior session's closing price of $8.21 per share.
Bonds: Treasury prices tumbled, raising the yield on the benchmark 10-year note to 2.80% from 2.77% Thursday. Treasury prices and yields move in opposite directions.
Lending rates mostly dropped. The 3-month Libor rate dipped to 1.16% from 1.17% Thursday, according to Bloomberg.com. The overnight Libor rate fell to 0.27% from 0.29% Thursday. Libor is a bank-to-bank lending rate.
Other markets: In Other markets: In global trading, Asian markets mostly ended higher and European markets rallied in the afternoon.
In currency trading, the dollar gained versus the euro and the yen.
U.S. light crude oil for May delivery jumped 96 cents to $61.68 a barrel on the New York Mercantile Exchange, a jump of 8.8%.
COMEX gold for June delivery fell $2.60 to $906.30 an ounce.
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