Dow falls 168 on disappointing jobs report

The sell-off comes as the government says the economy added 115,000 jobs in April, less than expected. The S&P 500 and Nasdaq suffer their worst weekly losses for 2012. Crude oil briefly falls below $98. Apple drops $16.

By Charley Blaine May 4, 2012 1:13PM
Charley BlaineUpdated: 6:15 p.m. ET

Stocks slumped today after the government reported only 115,000 jobs were created in April, substantially fewer than expected. The unemployment rate dropped to 8.1%, mostly due to people dropping out of the workforce.

The report heightened fears that the economy is stalling out for a third straight spring after a winter of relatively decent activity. The one offset: Payroll gains in March and February were revised higher by a total of 53,000 jobs.

The  Standard & Poor's 500 Index ($INX) and the Nasdaq Composite Index ($COMPX) suffered their biggest weekly losses of the year; the Nasdaq's daily loss was its largest since November. The Dow Jones Industrial Average ($INDU) fell nearly 170 points and ended the week lower after two weeks of gains. Energy and technology stocks were the weakest market groups.

Crude oil (-CL) in New York dropped below $98 a barrel for the first time since February on the news but later pushed above that level. Gold (-GC) moved slightly higher.

The Dow closed down 168 points to 13,038. The S&P 500 dropped 22 points to 1,369, and the Nasdaq was off 68 points to 2,956, its worst daily loss since Nov. 9. The Nasdaq-100 Index ($NDX) was off 67 points to 2,638.

Article continues below.
Apple (AAPL), down $16.57 to $565.27, was responsible for 13 points of the Nasdaq-100 decline. The stock fell 6.3% on the week, giving back all of its 5.2% gain in the week of April 27. The stock is still up 39.6% for the year.

The losses in U.S. stocks came as European stocks also fell, partly due to weak reports on the services sectors in Spain and Italy and worries about how Europe will cope with its debt crisis after elections this weekend in France and Greece.

The market decline came as the climax to a week where economic news was mostly worse than expected. The swoon will probably generate more talk about whether the Federal Reserve should try another round of quantitative easing to boost the economy. Quantitative easing is basically buying in government debt to keep interest rates.

Most Fed watchers think the Fed isn't likely to act unless economic conditions deteriorate.

Berkshire earnings miss estimates
After the close, Berkshire-Hathaway (BRK.B) shares were down 19 cents to $80.75. The conglomerate controlled by Warren Buffett said first-quarter profits more than doubled because the company's insurance subsidiaries avoided major disaster losses and the paper value of its derivative contracts improved.

Berskhire earned $3.245 billion in net income, or $1,966 per Class A (BRK.A) share. That's up from last year's $1.511 billion net income, or $917 per Class A share. For the class B shares (worth about one 1,500th of the Class A shares), the earnings came to $1.31, up from 64.4 cents a share.

Revenue grew 13% to $38.1 billion from last year's $33.7 billion.

Shares fell because analysts had forecast Berkshire would report earnings per Class A share of $2,297.50 on $39.154 billion in revenue.

Berkshire holds its annual meeting in Omaha, Neb.

Markets for the week



5/4/2012

4/27/2012

% chg.

YTD chg.
Dow Industrials

13,038.27

13,228.31

-1.44%

6.72%
S&P 500

1,369.10

1,403.36

-2.44%

8.87%
Nasdaq 

2,956.34

3,069.20

-3.68%

13.48%
Russell 2000

791.84

825.47

-4.07%

6.87%
Crude oil 

$98.49

$104.93

-6.14%

-0.34%
(per barrel)











U.S. Dollar Index 

79.25

78.76

0.62%

-1.59%
10-yr. Treasury

1.88%

1.93%

-2.74%

0.48%
Gold

$1,645.20

1,664.80

-1.18%

5.00%

The jobs report is a downer
The consensus among economists was that the jobs report would show a gain of some 160,000  jobs. Didn't happen. There were drags in construction, government, professional services, leisure and transportation. Government employment (federal, state and local) has dropped 215,000 in the past year.

Residential construction employment fell 2,500 to an estimated 566,000. The sector has lost 456,400 jobs since the peak in 2006. The number has changed very little since bottoming in November 2010.

There were decent gains in retail and temporary employment. Manufacturing gained 16,000 jobs -- and 170,000 jobs since October.

The most discouraging part of the report were contained in what's called the household survey, from which the unemployment rate is derived.

Yes, the rate fell to 8.1% from 8.2% in May, but the number of people employed fell by an estimated 169,000 in April as the number of unemployed actually fell by 173,000. The labor participation rate hit 63.4%, a rate not seen since 1982. The participation rate measures the how many people are working or looking for work compared with the potential work force.

Part of the decline is due to demographics. People are aging and retiring. Part of the decline is the continuing effect of the Great Recession.

So, what happened? The warm winter accelerated hiring in construction and other industries that otherwise would have slowed, wrote Ian Shepherdson, chief U.S. economist at High Frequency Economics. The run-up in gas prices in the early part of the winter, built on speculation of an outbreak of hostilities with Iran, then caused employers to dial back their hiring plans.

What's next? "We look for a better but still subdued pace of job creation in the 150,000-200,000 region over the rest of the year," wrote Nigel Gault of IHS Global Insight.

Crude oil takes a dive
Crude oil settled off $4.05 to $98.49 a barrel after dropping to as low as $97.51. Brent crude settled down $2.90 a barrel to $113.18 a barrel after falling to as low as $111.76. The retail price of gasoline was off slightly to $3.802, according to AAA's Daily Fuel Gauge Report. The arrprice has fallen 13.4 cents, or 3.4%, since peaking at $3.936 a gallon on April 6.

Energy shares were off sharply as a result.

Exxon Mobil (XOM) fell $1.08 to $84.57. Chesapeake Energy (CHK) was a rare winner, up 20 cents to $17.39.

Airline shares were higher as oil dropped. United Continental Holdings (UAL) was up 71 cents to $22.28. But Southwest Airlines (LUV) was off 12 cents to $8.10. Reason: The airline's famed interest in hedging its fuel costs could backfire if fuel prices really slump.

Gold, meanwhile, settled up $10.40 to $1,645.20 an ounce. Silver (-SI) rose 42.2 cents to $30.43 an ounce. Copper (-HG) slipped 1.5 cents to $3.721 a pound. Gold fell 1.2% for the week, with silver off 2.9%. Copper fell 2.6% for the week.

The worries about Europe pushed the dollar higher.

Interest rates were lower, with the 10-year Treasury yield falling to 1.88% from 1.924% on Thursday.

Energy prices -- New York close



Fri.

Thur.

Month chg.

YTD chg.
Crude oil (-CL)

$98.49

$102.54

-6.08%

-0.34%
(per barrel)











Heating oil (-HO)

$3.0088

$3.0869

-5.51%

3.25%
(per gallon)











Natural gas (-NG)

$2.279

$2.3400

-0.26%

-23.75%
(per mil. BTU)











Unleaded gasoline (-RB)

$2.9748

$3.0500

-4.76%

11.98%
(per gallon)











Brent crude 

$113.18

$116.08

-5.32%

5.40%
(per barrel)











Retail gasoline

$3.8020

$3.8030

-0.37%

16.06%
(per gallon; AAA)











(Note: An earlier version of this post incorrectly listed the Friday settlement price for natural gas. It is now correct.)

A frustrating week for stocks
The Dow and the S&P 500 suffered their worst declines since March 10. Moreover, the Dow's 1.44% loss was its second-worst week of the year, after a 1.6% decline in the week of April 9.

The S&P 500 and Nasdaq suffered their biggest weekly losses of 2012, down 2.4% and 3.7%, respectively. To make the situation more galling, the Nasdaq's percentage loss today is its worst of the year.

The losses were broad; of 44 domestic indexes that Market Dispatches tracks, 41 were lower. The only winners: gold mining, airline and utilities stocks. Newmont Mining (NEM) was up 57 cents to $46.16. But Freeport-McMoRan Copper & Gold (FCX) was off 47 cents to $36.40.

All 30 Dow stocks were lower. The best percentage performer, relatively speaking, was Procter & Gamble (PG), down 23 cents to $64.28. The laggard was Bank of America (BAC), down 26 cents to $7.74.

Some 42 S&P 500 stocks were higher, led by medical-instrument maker Carefusion (CFN), up $1.29 to $27.09, and Centerpoint Energy (CNP), up 33 cents to $20.05.

MicronTechnology (MU), up 8 cents to $6.55, was the sole gainer among Nasdaq-100 stocks. Micron gained on reports that it has won the bidding for failed Japanese chip-maker Elpida.

Green Mountain Coffee Roasters (GMCR) had rallied in the morning but finished down 77 cents to $25.10. The stock had found initial support from a leaked memo from Starbucks (SBUX)  CEO Howard Schultz that his company will sell two new varieties of coffee for use in Green Mountain's Keurig brewers. "Starbucks K-Cups continue to see robust gains," Schultz wrote.

Yahoo (YHOO) fell 25 cents to $15.15 after a major shareholder disclosed an inaccuracy in CEO Scott Thompson's resume and demanded his ouster. Daniel Loeb noted that Thompson claimed a degree in business and computer science from a college that didn't offer a computer science degree until four years after Thompson graduated.

Short hits from the markets -- New York close



Fri.

Thur.

Month chg.

YTD chg.
Treasury yields











13-week Treasury bill

0.0700%  0.080%

-22.22%  600.00%
5-year Treasury note 

0.784%  0.817%

-3.33%  -5.54%
10-year Treasury note

1.880%  1.924%

-1.83%  0.48%
30-year Treasury bond

3.071%  3.112%

-1.22%  6.30%
Currencies











U.S. Dollar Index

79.587  79.293  0.94%  -1.16%
British pound

1.6155  1.6186  -0.53%  3.97%
(in U.S. $)

          
U.S. $ in pounds

£0.619  £0.618  0.54%  -3.82%
Euro in dollars

$1.31  $1.32  -1.14%  1.07%
(in U.S. $)

          
U.S. $ in euros

€ 0.764  € 0.760  1.15%  -1.06%
U.S. $ in yen 

80.00  80.20  0.00%   3.76%
U.S. $ in Chinese

6.33  6.30  0.42%  0.03%
yuan

            
Canada dollar

$1.005  $1.012  -0.81%  2.46%
(in U.S. $)

          
U.S. dollar 

$0.996  $0.988  0.82%  -2.40%
(in Canadian $)











Commodities

 

 

 

 
Gold (-GC)

$1,645.20

$1,634.80

-1.14%

5.00%
(per troy ounce)











Copper (-HG)

$3.721

$3.736

-2.83%

8.29%
(per pound)











Silver (-SI)

$30.4320

$30.0100

-1.88%

9.02%
(per troy ounce)











Wheat (-ZW)

$6.0950

$6.1550

-6.88%

-6.63%
(per bushel)











Corn (-ZC)

$6.2025

$6.145

-2.21%

-4.06%
(per bushel)











Cotton 

$0.8799

0.8921

-1.58%

-4.02%
(per pound)











Coffee

$1.7460

1.758

-2.76%

-23.97%
(per pound)











Crude oil (-CL)

$98.49

$102.54

-6.08%

-0.34%
(per barrel)










 

123Comments
May 4, 2012 1:38PM
avatar

"The consensus among economists was that the jobs report would show a gain of some 160,000 or so jobs. Didn't happen"

 

There are no "experts" on what's going to happen but rather a bunch of over educated people who get paid to spew forth their opinion.  Maybe the truth is finally kicking in and the reports are finally revealing the truth of our economy...it sucks!!

May 4, 2012 1:59PM
avatar
The investors are waking up to the fishy numbers......Unemployment keeps going down because more people drop out looking for work..? Food stamp reciepents now at highest ever...? stocks are deflating like a McCafe or Frappe left out for 20 mins......IT IS ALL WHIPPED AIR AND A LOT OF BAD COVER UPS FROM THE MEDIA WHICH CAN NOT REPORT IT WITHOUT MAKING A FACE ANY MORE......AND THE JOKE IS ON YOU...!!!
May 4, 2012 2:09PM
avatar
This means Starbucks and Green Mountain can take food stamps so there stock is down. Gas reserves at all time high...People have stopped driving arround....NO JOBS... NO INCOME....AND NO HOPE from either party......Watch inflation start to go up after the elections  Core inflation is at 4.3% when you add the the core food and fuel....I have never seen so many stupid degreed (Harvard, Yale, and so on ) individuals not know a thing about economics and simple Finance 101.....Fix the tax code...do not spend more that you take in and Save the middle class..and not the banks ..the banks are worthless !!!
May 4, 2012 2:59PM
avatar
Its amazing that obama says one thing and the stock market says just the opposite. Somebody LIED!!
May 4, 2012 2:44PM
avatar
Simple solution if you recieve a government checkof any kind you dont vote, you get welfare food stamps you dont vote,if you dont have an ID to prove you live were you vote you dont vote. if these things happen NO DEMOCRAT COULD EVER GET ELECTED
May 4, 2012 2:52PM
avatar
all the so-called created jobs are minimum wage $7/hr jobs  , good luck living on that the at the current minimum wages you have to work 20 hours just to put gas in your suv LOL
May 4, 2012 2:38PM
avatar
Those in the Media tried to brain wash us into thinking the breaking point would be GAS at 4.80 a gallon in fact when gas hit 4.10 a gallon everthing staredt slowing down and stopping...now to th point that the "R" word Recession is start to filter in some discussions again.......and you can see it...Sears dumping craftsman to home depot before the inevitable BANKRUPTCY.......Startbuck now selling Juice and Beer....? WOW....! What a desparation move...Coffee sales going south after all new and old job seekers cannot afford a 6.00-7.00-8.00 Latte anymore.....Stores closings Left and right..GAP, GUESS, Blockbuster, Best Buy, Sears, KMart, Hollywood Movies all suck and decline restaurant ticket sales, Beer sales at all time low and falling airlines chargeing more bagage fees to stay afloat.....food cost at all time highs YEA it is all rosie... just like the media wants us to think. 30 years ago I saw a clip of china all the people where riding bicycles and we where all driving big cars.......I see us riding bicycles and clown like cars and the chineese drive nice cars. The Chinesse are OUR Middle Class NOW.....!!!!!
May 4, 2012 2:15PM
avatar

Wait...listen very carefully......turn off the TV......put your ear to the ground...yup sure as shootin that faint sound you hear is that summer of recovery making its presence felt again....  whoops no....sorry, that sound was a fracking operation somewhere in North Dakota where their seems to be plenty of jobs. Guess BO will do his best to shut that down next in his plan to rule the world 

 

Progressive=Communist=Socialist=Liberal=End of the USA if we dont rid us of them

May 4, 2012 2:47PM
avatar

Stock Market should be about  9,000    and  the true unemployment should read about  10%  at least.   Underemployment and  people who have given up on jobs is at least another  10%

 

Those numbers are much closer to the truth, and obame and all is Zars    LIE and CHEAT

May 4, 2012 4:00PM
avatar
There never has been a recovery. The economy needs to create 150,000 jobs per month, just to keep up with people entering the work force. When the government touts 200-250 thousand jobs for a month (always revised down the next month). The economy really only added 50-100 thousand jobs. At that pace it will take between 20-30 YEARS to replace all the jobs lost over the past 5 years. How many people do you know who found a job over the last couple of years? Those looking are still looking. The Sheeple need to realize that BOTH the Democrats AND Republicans are to blame for this disaster, BOTH parties are bought and paid for and have thrown the middle class under a bus. Until people realize this there is little chance for a recovery.
May 4, 2012 2:47PM
avatar

classiclady

There real UE is more like 24%.Odumos D.O.L does not count people whose UE benifits run out,as a matter of fact when their UE BENIFITS run out they magically count as employed, in the odumbo world

May 4, 2012 4:06PM
avatar

I love the new Obama math:  Thousands of overall jobs lost yet the unemployment rate drops!  LMFAO!!

 

BTW, who the hell knows how many people quit looking for work?  About 90% of job searches are done thru the net now.  There is no way these figures are close to being accurate.  The real rate is 17%.  Thanks God the worst prez in US history will be gone in a few months.

May 4, 2012 2:27PM
avatar
The other disapointing news about the anemic job report of only 115,000 jobs being added is that more than likely these are low paying entry-level service type positions which don't allow for creation of incremental disposable income which in turn could be spent to help the economy get going.  It seems the trend now is we are adding about 120,000 jobs per month whereas I believe we need to be adding something like 400,000 just to start to get back to where things were before.  Just remember....numbers don't lie...just the people reporting them! 
May 4, 2012 3:02PM
avatar
This post got deleted - why?
MSN: Stocks sink on weak employment data
The US economy gained fewer jobs than expected last month, though the unemployment rate ticked down to 8.1%. A gauge of European business activity declines. Oil falls 4%. Weekend elections in France and Greece add to market jitters.

Craig: Stocks stink; Employment stinks.
The US economy lost jobs last month, though the unemployment rate ticked down to 8.1%, It is a fake number. European business activity declines, except for prostitution.. Oil down 4% on the fact no one drives anymore to work.. Weekend troop movements in the middle east seem to have gone unnoticed. In other news Mitts's wife's blouse cost less then Obama's wife's purse from the same designer. 
May 4, 2012 3:19PM
avatar

Yep ole President Obama must be right. The economy is getting better. Yep' Yep' These stocks constantly falling on jobless report today but rebounding tomorrow on a different look on the jobless. Everything dropping because of a problem with Europian economy but oh no the next day their central bank is going to step in. Oh no, Spain is in trouble one minute but oh no again someone or something steps up to say they will help them out.

 

Let's face it we are getting shafted not only by those that are controlling the markets (those that have the most) as our own government has and is still screwing things up. Let's face it we are headed to a two class society. Those that have and those that don't.

May 4, 2012 3:30PM
avatar

classiclady

 

your sources are government entities that lie and alway revise their numbers everytime scince odumbo stepped into office. google is a nice tool(real unemployment)facts are there are 7 million less employed people scince odumbo took  office try to spin it anyway you want, you can get these numbers from a government website

May 4, 2012 3:51PM
avatar

How can anyone believe any of the numbers that are being put out by the government anymore. Every number they give is revised and then re-revised. The unemployment rate is anywhere from 8.1% to 20% depending on where it is comming from.

 

If the fed keeps up with the QE the dollar will be worthless.

May 4, 2012 3:08PM
avatar
Does anyone know how much money did the Federal government make  and collected on cashed in 401K penalties?  The fleecing of Americans starts here ;  Create a economic problem and make Americans use up all their savings and gut the middle class...If the Government does it, why can't all the rest...like Banks....Wall Street ... fake IPO profits....Zynga...Face Book...Group on...GM.....AIG and Pile on more debt. Diluting shares and holding Cash (if it really exists)... I think those reserves do not exists....... I think all of those so called corporate Billions in so call corporate reserves are really cash from Loans and refinance at lower rates (and other liabilities: Bonds, second offerings all worthless paper) it is all a shell game and we are getting swindled...The numbers just do not make sense...! This house of cards is about to fall....!
May 4, 2012 3:56PM
avatar

Hold on folks I am going to shock you:

 

All Politicians lie to us: reason is no one will vote for a person if they tell the truth that solutions for  big problems are complicated and take time

 

Politicians create short term band -aid solutions : reason is when they run again for office no one will vote for a politician whose claim to fame is that things will be better 10 years from now.

 

Jack Nicholson said it best in the movie: You want the truth , you can't handle the truth

May 4, 2012 3:39PM
avatar
With all the fake unemployment numbers and the bogus profits from the banks, " I told you so".  Smile
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