Stocks slump on disappointing employment report

The economy added just 88,000 jobs in March, while the unemployment rate dipped to 7.6%. The major indexes are headed for their worst week of 2013.

By Charley Blaine Apr 5, 2013 11:31AM
Updated: 5:08 p.m. ET

Stocks opened sharply lower on Friday after the Labor Department reported a smaller-than-expected gain in jobs during March. But the losses were trimmed by more than half in the afternoon.

The monthly report estimated that only 88,000 jobs were created in March, the smallest gain in nine months and much lower than the 190,000 gain that economists had been  expecting. The unemployment rate fell from 7.7% to 7.6%, but that was because 500,000 people stopped looking for work.

The report shows that the U.S. economy "is undergoing another spring slowdown, albeit from a pretty rapid pace of growth in the first quarter," Paul Ashworth, chief U.S. economist for Capital Economics, wrote clients this morning.
The Dow Jones industrials ($INDU) finished down 41 points to 14,565 after falling as many as 172 points right after the open. The Standard & Poor's 500 Index ($INX) fell 7 points to 1,553, and the Nasdaq Composite Index ($COMPX) had dropped 21 points to 3,204.

In addition to the Dow's rebound after its big loss at the open, the S&P 500 was down as many as 20 points before it began to crawl back. The Nasdaq had been down as many as 56 points.

While the jobs report was probably the largest factor in the market's slide, worries about tensions on the Korean peninsula also were weighing on stocks. Construction workers © image100/Corbis

The North Korean government suggested, for example, that Russia remove its diplomatic staff from Pyongyang, the North Korean capital.

Interest rates dropped, and oil prices were lower. Crude oil (-GC) in New York settled down 56 cents to $92.70 a barrel. For the week, crude was off 4.7%. Gold (-GC) jumped $23.50 to $1,575.90 an ounce but still ended the week down 1.2%.

The report means one thing for sure: The Federal Reserve is not going to change its policy of buying up to $85 billion a month in bonds to keep interest rates low. The central bank has said it will pursue the policy until the jobs picture improves substantially.

The report may have been a big disappointment to investors and economists, but it was not a surprise. Economic data this week had mostly suggested the economy in March might be slowing after decent months in January and February.
At the same time, the effects of the sequester -- across-the-board federal spending cuts -- really weren't a factor in the report, in part because data is collected in the middle of the month. But the effects are coming, economists said.

"Hopes that the economy could sustain a 200,000-plus monthly job creation rate will have to be deferred until 2014," wrote Nigel Gault, chief U.S. economist with IHS Global Insight.


The major averages all ended lower for the week and, in fact, the S&P 500 and the Nasdaq had their worst weekly performances of the year.

The Dow ended down 0.1% loss on the week, with the S&P 500 down 1% and the Nasdaq down 2%. It was the Dow's fourth weekly loss of the year, but the largest loss was just 0.12% in the week ended Feb. 8. The S&P 500 and Nasdaq have suffered only three weekly losses in 2013.

The Dow is up 11.2% for the year, with the S&P 500 up 8.9% and the Nasdaq up 6.1%.

The big question is if the market is starting to tip over. Possibly. The Russell 2000 Index ($RUT), which tracks small-cap stocks, fell nearly 3% on the week and is down 3.1% since hitting an all-time high on March 14. It ended Friday trading below its 50-day moving average, a key measure of investor confidence. The Russell index is watched closely as a leading indicator.

Also watched closely as an economic barometer is the Dow Jones Transportation Average ($DJT), which fell 48 points to 5,961 on Friday and was off 3.5% on the week -- after rising 19.8% in the first quarter. Airlines were the weakest components in the index for the week. Delta Air Lines (DAL) was down 12.8%, the worst performer among stocks in the index.

Only 12 of the 30 Dow stocks were higher on Friday, led by Boeing (BA) and JPMorgan Chase (JPM). The laggards were American Express (AXP) and Cisco Systems (CSCO). A total of 165 S&P 500 stocks showed gains, led by Nabors Industries (NBR) and WPX Energy (WPX).

Twenty-two stocks in the Nasdaq-100 Index ($NDX) were higher; the index was off 33 points to 2,762, led by graphics chip maker NVidia (NVDA) and software developer Equinix (EQIX).

The laggard was F5 Networks (FFIV), down $17.21 to $73.21. The maker of data-management equipment reported preliminary quarterly profit and revenue that missed its forecast as North American sales slowed. A number of brokerages downgraded the stock on Friday.

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25Comments
Apr 5, 2013 11:57AM
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Disappoints?   I am sure Obama is dancing in the streets  because the unemployment rate went down...

The real problem is less people are working today than when the rate was at 9.9%....  Even though according to the census the number of working age people has increased.

More troubling still, is that when people are retiring today (in record numbers) those jobs seem to disappear rather than be filled... 

The picture grows worse the more you study the numbers...
Apr 5, 2013 1:37PM
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It is so clear month after month that big daddy Bernanke's strategy is not working.

There will be no recover until rates are set to reflect market conditions, so that savers can earn a reasonable rate of return on their CD's. 

Oh by the way, Bernanke isn't keeping rates low in hopes of lowering unemployment.  He is doing it to help his buddies on Wall Street and the banksters.  Plus, if he ever let the market determine rates, the interest on the deficit would sink us fast.  At a soon to be $17 trillion deficit, an addtional 3% in interest rates would be an additonal half trillion per year, or another trillion every other year, on top of the deficits we are already running. 

So we really painted outselves in a corner, and the only real economy is big daddy Bernanke's printing press business.

 

Apr 5, 2013 1:47PM
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But our President is going to give 5% of his wage back that will help.How about taking away Michelle,kids and mother-in laws vacations on Air Force One that would eliminate at least a Million per trip versus what $20,000.?
Apr 5, 2013 2:52PM
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If these cnbc clowns would actually guage the american consumer, they would realize there is not going to be a big economic boom coming. This is the new normal, if car sales go up one month, that is because people HAVE to buy a car to replace the one that they've run into the ground. I have a pretty good job, have two cars, one has 181,000 miles on it, the other 172,000, and I plan on keeping them til they die, and I think most people are in my same boat. I might be able to buy a house before too long, so long as the "investors" don't artificially jack up the prices of real estate again, then I will not be able to buy, and they will be stuck with homes, again, just like what happened before. Anyway, we are a consumer based economy, and the consumer has nothing left but dry pulp. 
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The Obama Legacy is being written. I will give it a name right here: The Pathetic Presidency - The Decline and Fall of a Nation. The Bystander - in - Chief  Barack Obama has presided over the following: No economic recovery during his Presidency. Mass exodus of jobs - POOF, they have vanished, never to return! An unemployment rate that the Media is too afraid to widely report to those who REALLY need to know (we here know it but the average **** American doesn't even though they are living it) ObamaCare - a tragedy in the making. A retreat in the face of Islamic terrorists. An assault on our Bill of Rights and freedom.
Apr 5, 2013 12:50PM
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Is this the start of the correction?
Apr 5, 2013 2:28PM
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gee I'm just shocked!! no!!! really?? but, but, but!!! everythings coming up roses??!! isn't it??? awwww!!!! yea right unemployment 'dipped' to 7.6% maybe with Marxist math, but now in realityville where I live it didn't!! factoring the people that dropped outta the workforce unemployment is an ez 11% in NY alone!

 

meanwhile you wanna have a good laugh at the stupidity of the lefty loony democraps? keep readin' hehehe I'm LOL'ing here on the floor in the meantime....

 

Democratic Rep. Diana DeGette is being ridiculed by gun-rights advocates after the ardent supporter of a high-capacity magazine ban appeared to flub the facts on what a magazine actually is. 

Her widely noticed comments were made at a Denver Post forum earlier this week on the gun debate. 

Questioned on what's to be done with the millions of high-capacity magazines already in circulation, DeGette asserted that they'd be discarded once they're used. 

"I will tell you these are ammunition -- bullets -- so the people who have those now they are going to shoot them, and so if you ban -- if you ban them in the future, the number of these high capacity magazines is going to decrease dramatically over time because the bullets will have been shot and there won't be any more available," she said.  hahaha!!!! HAAAHAHAHAHAHAHAH!!!! DUH!!!! bet this bitch can't find her way outta her apt without a GPS!! bet she can't even work that either!!


 hey America idiots like this are in the gov't, can you believe this?? this kind of moron is making comments on something she has ZERO knowledge in, and these kind of azzholes are in positions of power? now just add idiots like this to other gov't positions, scared yet?? you should be!! where do you think obamacare came from, IDIOT minded liberal pigs like this!!!
Apr 5, 2013 2:53PM
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Looks like the "manipulators" are at hard at work today to minimize the market losses.  At one point the market was down over 170 points but is now only down 77 points.  Government intervention?
Apr 5, 2013 4:29PM
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Weak jobs data isn't the word for it. Recovery will never happen with obama!
Apr 5, 2013 4:32PM
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This crappy jobs number is excellent news for the market!  It means Bernanke won't end QE anytime soon.  So keep riding this ugly horse straight up the mountain until her knees buckle or break.  Just make sure you're not tied down and ready to dismount at a moments notice.  God help you if that saddle is still between your legs when this bi+ch goes down.
Apr 5, 2013 4:06PM
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The unemployment rate fell from 7.7% to 7.6%, but that was because 500,000 people stopped looking for work.  Of course, all the fu_king jobs went to China.  America will never be the great manufacturing county it was.
Apr 5, 2013 4:18PM
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Mary, Mary, quite contrary
how does your economy grow
when you keep taking money out of it?
Apr 5, 2013 3:36PM
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We are coming into pump and dump time ... careful
Apr 5, 2013 4:26PM
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LIES....LIES...LIES....total PUMP and DUMP by the opportunistic hedge fund titans courtesy of Helicopter Ben's fiat money....Total lies on unemployment rate (likely still at 9 to 10%) but they don't count the folks who have been laid off since 2009 but their benefits ran out so they aren't counted anymore....what a crock!
Apr 5, 2013 4:07PM
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All a declining unemployment rate means is that an increasing number of unemployed are no longer eligible to receive unemployment insurance. Now there are positives to this. It means people, uninspired by a dismal job market, are forced to go out and take jobs that they might not have before. Don't misunderstand this STILL means we have a nation of people that are 'underemployed' and, even working, cannot afford to live in the manner they have grown accustomed to. I'm not certain how or if the under-employment rate is measured. If I scratched and clawed for a Masters degree I would not want to do certain jobs, either. This, however, is our reality and part of the cycle that we live in now. Over educated are un or under employed we, therefore, need illegal immigrants to do the work that others won't so if we evict them, basically, our labor force implodes because we have become a white collar, service industry nation. At least, that appears to be the ideology as I see it. As I write this my single lament is that I never became a general contractor, a plumber, or an electrician. If my kids come to me and say 'Dad I want to major in Business Administration!', I'm sending them straight to their room! No supper! 
Apr 5, 2013 4:39PM
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The problem is: America is not investing ENOUGH in JOB CREATING MECHANISMS in other words market sectors which support continued employment for american engineers, technicians, contractors, skilled labor groups, sub contractors, street vendors, restaurants, motels, admin staff, etc, etc. Congress (which is so divided on this issue between party lines) is yet to approve funding for basic fundamental job creating industries such as america's crumbling transportation infrastructure !

 

Banks do not create jobs they are focused more on making money for their investors/stock owners.  Investors (rich 2%) with stashes of cash sitting in banks focused more on making money for themselves not helping the unemployed or the infrastructure.!! 

Apr 5, 2013 3:26PM
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Mr. Charley Blaine....I want to thank you for all the in depth Articles you have written, and much of the factual information you always laid out....And our priviledge to be able to comment on Sections..

I myself will be taking a sabbatical in the near term after reaching 10,000 or so comments.

 

I will still be around to read some of the articles and comments occassionally, but probably refrain making many comments...Good or Bad..

I'm getting busier this time of year, and I also plan to spend more time fishing too.

 

Thanks again Charley and other Premium writers on MSN...I've enjoyed much of it.

Apr 5, 2013 4:31PM
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Not all stock are down,  Ston is up 1.04 it a stock to die for. 7 of my 10 are up today.

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