US stocks slump following disappointing August job report

Stocks register mild weekly losses

US stocks ended with little losses for the week that ended on Friday, 02 September 2011. Aggressive selling on Friday following a disappointing job report extended a slide that started a day before on Thursday. That effectively erased gains staged in the first half of the week, giving the stock market a fractional weekly loss.



For the week, that ended on Friday, 02 September 2011, Dow ended lower by 43.95 points or 0.4% to 11,240.46. The Nasdaq gained 0.53 points or 0% to 2,480.53 and the S&P 500 lost 2.83 points or 0.2% to 1,173.97.

An upward trend carried stocks higher at the start of the week. Buyers were encouraged by signs of improved sentiment in Europe, where news of consolidation in Greece's banking industry was regarded as a step toward stabilizing the country's banking system. But stocks started sliding from Thursday, 01 September and extended the same to Friday, 02 September when indices suffered their worst one day losses in more than two week's time.

During the week, investors digested the data of an abysmal Consumer Confidence Index reading of 44.5 for August; it was the worst level for the Index since April 2009. The stock market attempted to bounce in response to a better-than-expected August ISM Manufacturing Index reading of 50.6. Speculation about a third round of quantitative easing has been rampant, but minutes from the most recent FOMC meeting failed to make note of any such plans. Instead, only a mention of the Fed's intent to monitor conditions and take action, if determined necessary, was made.

U.S. stocks finished sharply lower on Friday, 02 September 2011 in response to a disappointing monthly payrolls report. The Dow Jones Industrial Average finished the session down 253.31 points, or 2.2%, at 11,240.26. The Nasdaq Composite Index dropped 65.71 points, or 2.6%, at 2,480.33. The S&P 500 declined 30.45 points, or 2.5%, at 1,173.97, with the financial sector slammed the hardest among the benchmark's 10 industry groups.

All 30 Dow components fell, with Bank of America off 8.3% and J.P. Morgan Chase down 4.4%, after the New York Times reported the lenders to be among the big financial institutions that could be sued by the Federal Housing Finance Agency for misrepresenting the quality of mortgage securities sold at the peak of the housing bubble.

Losers outpaced winners nearly six to one on the New York Stock Exchange, where 975 million shares traded hands. Composite volume topped 3.8 billion.

Latest data showed that the U.S. economy did not add any jobs in August. It was the weakest performance for nonfarm payroll since September 2010. According to official data from the Labor Department, no nonfarm payroll additions were made during August. That contrasted with the consensus call for an increase of 70,000. Even nonfarm private payrolls increased by a mere 17,000. Unemployment rate stayed at previous rate of 9.1%.

Crude prices ended lower on Friday, 02 September, 2011 at Comex. Prices stumbled after the weakest jobs data in nearly a year drove U.S. stocks sharply lower and spurred concerns about the U.S. economy and prospects for oil demand. Light and sweet crude for October delivery fell $2.48 (2.8%) to $86.45 a barrel on the New York Mercantile Exchange on Friday. For the week, crude gained 1.3%.

Precious metals shot up on Friday, 02 September, 2011 at Comex. Prices shone following big sell-off at Wall Street following a disappointing job report for the month of August from the Labor Department. Gold for December delivery rose $47.8 or 2.6%, to end at $1,876.9 an ounce on the Comex division of the New York Mercantile Exchange on Friday. On the week, gold rallied 10%. On Friday, silver prices for December delivery rose $1.54 (3.7%) to end at $43.07. For the week, silver gained 5.2%.

Treasuries climbed sharply, such that the yield on the benchmark 10-year Note returned to 2.0%.

Indian ADRs ended with big losses on Friday. HDFC Bank, ICICI Bank and Tata Motors led the decliners shedding 4.2%, 3.6% and 3.1% respectively.

For the year, Dow, Nasdaq and S&P are lower by 2.9%, 6.5% and 6.7% respectively. U.S. markets are closed on Monday, 05 September in observance of Labor Day.