Job report disappoints Wall Street

US stocks register second consecutive weekly losses

Dour economic reports pushed US stocks back to the wall once again on Friday, 02 October, 2009 and stocks registered their second consecutive weekly losses. Economic reports suggested that economic recovery might not be as fast as being anticipated.

For the week, that ended on Friday, 02 October, 2009, The Dow Jones Industrial Average ended lower by 177.52 points (1.8%) at 9,487.67. The Nasdaq Composite Index, ended lower by 42.81 points (2%) at 2,048.11. S&P 500 ended lower by 19.17 points (1.8%) at 1025.21. Nine of ten sectors registered weekly losses led by industrial sector.

News that the International Monetary Fund raised its forecast for 2010 global economic growth to 3.1% from earlier figure of 2.5% had no real positive impact on the market. The IMF forecast was widely disregarded; market participants were focused on several other reports, including another disappointing jobless claims tally.

Among the economic reports expected for the week, initial claims climbed 17,000 to 551,000, which was higher than had been expected. Continuing claims came in at 6.09 million, which was below the consensus estimate and down 70,000 from the previous week. In a separate report, Personal income and spending for August were up 0.2% and 1.3%, respectively. Both exceeded expectations, while core personal consumption climbed a mere 0.1%, as expected. The ISM Manufacturing Index for September came in at 52.6, which was below what was expected, but the figure still indicated growth in the manufacturing sector. A separate economic report showed that construction spending during August made a surprise 0.8% increase, while pending home sales for August surprised some by increasing 6.4% in August.

In the Wall Street on Friday, 02 October, 2009, technical support and a retreating dollar helped stocks bounce back after falling sharply in response to a disappointing jobs report, but there simply weren't enough buyers to drive stocks to a sustainable gain. In turn, stocks logged their fourth straight loss.

However, stocks were able to stop their slide for a brief time as stocks were helped off of their lows by a retreating U.S. dollar. A stronger dollar had weighed on stocks during the previous session. Despite a couple sources of support, the broader market managed only to poke into positive territory for just a moment.

The Dow Jones industrial Average ended lower by 21.61 points on Friday, 02 October, 2009 at 9487.67. The Nasdaq shed 9.4 points to end at 2048.11. S&P 500 ended lower by 4.64 points at 1025.21.

The Labor Department reported on Friday that 263,000 payroll jobs were lost in September and the unemployment rate rose to a 26-year high of 9.8%. Market expected a decline of 167,000 jobs. September was the 21st consecutive month of job losses. Since the recession began in December 2007, 7.2 million jobs have been lost and the unemployment rate has doubled.

Crude prices ended lower at Nymex on Friday, 02 October, 2009. Prices fell following a disappointing job report that hit the wires at Wall Street on Friday. With Friday's losses, crude curtailed its weekly gains also. On Friday, crude-oil futures for light sweet crude for November delivery closed at $69.95/barrel (lower by $0.87 or 1.2%). During intra day trading, it fell to a low of $68.27. For the week, crude ended higher by 6%.

In the currency market on Friday, the dollar index, which measures the strength of dollar against a basket of other currencies, fell by almost 0.5%. The dollar lost almost all its strength against the euro.

Also on Friday, November natural-gas futures rose 25.2 cents, or 5.6%, to $4.718 per million British thermal units. The contract dropped more than 7% in the previous session.

For the year, The Dow, Nasdaq and S&P 500 are higher by 8.1%, 29.9% and 13.5% respectively.