Stocks fall on unexpected job cuts
US companies shed 39,000 jobs in September. Investors speculate the Fed might take steps to boost the economy. General Electric plans to buy Dresser for $3 billion.
By Melinda Peer, TheStreet
Updated at 1:25 p.m. ET
Stocks were falling Wednesday after American companies expectedly cut jobs in September, raising concerns about the economy.
At 1:25 p.m. ET, the Dow Jones Industrial Average ($INDU) was down by 20 points, or 0.2%, at 10,925. The S&P 500 ($INX) was down by 5.3 points, or 0.5%, at 1,155. The Nasdaq ($COMPX) was losing 30 points, or 1.3%, to 2,370.
U.S. companies shed 39,000 positions in September after adding 10,000 in August, Automatic Data Processing (ADP) said. Economists had expected to see an increase of 18,000, according to Briefing.com. The decline followed seven months of job gains.
"There is simply no momentum in employment," ADP said. The government will release jobs data for September on Friday.
Planned layoffs rose slightly in September, according to a report by global outplacement consultancy Challenger, Gray & Christmas. During the month, employers announced plans to cut 37,151 jobs, representing a 7% increase from planned reductions in August.
"Personal income levels in August were buoyed by the extension of unemployment benefits which had otherwise expired," said Jim Baird, chief investment strategist for Plante Moran Financial Advisors. "Take that away, and inflation-adjusted personal income growth has been virtually non-existent in the past three months."
The prospect of additional funding from the Fed was pressuring the dollar on Wednesday, with the dollar index down by 0.5%. Speculation about quantitative easing gained steam after the Bank of Japan cut its key interest rate almost to zero Tuesday.
U.S. Treasury Secretary Timothy Geithner took aim at China's currency when he warned Wednesday that large economies with undervalued exchange rates risk could create asset bubbles in emerging economies or dismal consumption growth, according to the Wall Street Journal.
The International Monetary Fund said the U.S. economy will grow 2.6% in 2010 and 2.3% in 2011, according to the IMF's World Economic Outlook, which was released on Wednesday. Those forecasts were reduced from July's estimates for growth of 3.3% in 2010 and 2.9% in 2011.
General Electric (GE) was best-performing stock on the Dow, rising 2.7% to $16.96. The company agreed to buy Dresser, a company that makes gear for oil fields, for $3 billion.
Johnson & Johnson (JNJ) said it will acquire the Dutch biotechnology company Crucell (CRXL) for $2.43 billion. Johnson & Johnson shares were rising 0.1% to $62.84, while Crucell's American depositary receipts were up 0.8% at $34.10.
Shares of Costco Wholesale (COST) were slipping 2.6% to $63 after the company’s quarterly sales fell short of estimates. Sales rose 8% to $23.59 billion but fell short of revenue estimates for $24.23 billion.
3M (MMM) is allowed to move forward on its $943 million purchase of fingerprint-identification company Cogent (COGT) after a judge refused Cogent shareholders' requests for an injunction to prevent the deal in favor of an offer from NEC, according to Bloomberg. 3M's stock was down 0.1% at $88.80, and Cogent's stock was losing 1.4% to $10.58.
Late Tuesday, Allied Irish Bank (AIB) announced its decision to sell its $2.2 billion stake in M&T Bank (MTB) through a public offering, a move that puts an end to any deal speculation, according to an analyst. Allied Irish's stock was declining by 3% to $1.30 and M&T's stock was losing 6% to $78.09.
The Energy Information Administration said crude oil inventories gained 3.1 million barrels in the week ended Oct. 1, compared with estimates of a decline of 1.3 million barrels. Late Tuesday, the American Petroleum Institute reported a 4.44 million-barrel increase in crude oil inventories. Gasoline supplies and distillates stockpiles declined by 2.7 million barrels and 1.1 million barrels, respectively.
The November crude oil contract was shedding 2 cents at $83.62 a barrel.
The December gold contract, the most actively traded godl future, was gaining $5.60 to $1,345.90 an ounce.
The benchmark 10-year Treasury note strengthened by 10/32, diluting the yield to 2.437%.
The FTSE in London were rising 0.8% and the DAX in Frankfurt was up 0.9%. Hong Kong's Hang Seng gained 1.1%, while Japan's Nikkei jumped 1.8%.
- 10 banks defying the Great Recession
- Dow stocks with low dividends are still attractive
- 5 stocks for long-term investors
Copyright © 2013 Microsoft. All rights reserved.
Quotes are real-time for NASDAQ, NYSE and AMEX. See delay times for other exchanges.
Fundamental company data and historical chart data provided by Thomson Reuters (click for restrictions). Real-time quotes provided by BATS Exchange. Real-time index quotes and delayed quotes supplied by Interactive Data Real-Time Services. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by SIX Financial Information.
[BRIEFING.COM] The S&P 500 ended this week with a bang, roaring to a new all-time high on the back of stronger-than-expected economic data, influential leadership, and an ongoing appreciation for the Fed's monetary policy support.
The bullish bias was evident in premarket action as the S&P futures pointed to a higher start without the benefit of any definitive news catalyst. Stocks indeed benefited from a blast of buying interest at the opening bell on this ... More
More Market News
|There’s a problem getting this information right now. Please try again later.|
LATEST MARKET DISPATCHES
- No more Dispatches; here's where to find market news
The Market Dispatches column has been discontinued. Here's where to find the latest stock and business news on MSN Money, and the latest from market writer Charley Blaine.
- Dow falls 59 as late-day gloom kills a rally
- Stocks held back by fiscal-cliff worries
- Stocks suffer worst weekly loss in 5 months
- Dow off 121 as post-election swoon continues
- Dow slumps 313 after Obama's re-election
- Dow jumps 133 as Americans head to the polls
All hail the bull market, which ended the week with a big rally. But it also is starting to look a little like 1987, which suffered an epic blow-out.