By MADLEN READ, AP Business Writer
3 minutes ago
Wall Street slipped modestly Thursday after the Labor Department reported a spike in jobless claims, sapping some of the market's confidence ahead of Friday's anxiously anticipated March employment report.
Wall Street was disappointed to hear the government say the number of people applying for unemployment benefits rose by a full 38,000 last week to 407,000 — the highest level since September 2005. The less volatile four-week average of claims also increased, by 15,750 to 374,500.
However, the stock market's losses were mild, particularly given the huge advance Wall Street logged Tuesday and has mostly maintained. Investors got a bit of relief from the Institute for Supply Management which said Thursday the services sector contracted only slightly in March — a stronger performance than in February, and a better reading than many economists predicted.
"We're still holding up," said Steven Goldman, chief market strategist at Weeden & Co. in Greenwich, Conn. ""We've had a big rally." The Dow Jones industrial average, which shot up nearly 400 points on Tuesday, is up more than 7 percent since March 10, when it hit its lowest level since October 2006.
Meanwhile, Wall Street was cautiously listening for new information about the economy and financial system from Federal Reserve Chairman Ben Bernanke, who was appearing before Congress for a second straight day. On Wednesday, the Fed chairman said a recession is possible in the first half of this year, and on Thursday focused on its decision to aid JPMorgan Chase & Co.'s purchase of the struggling Bear Stearns Cos.
"People are listening, trying to get a general understanding of the role the Fed played with Bear Stearns," Weeden & Co.'s Goldman said. "But I don't think it's swaying trading."
With a broad swath of corporate earnings reports set to arrive in the coming weeks, the market is eager for signs that the economy, while undeniably weak, is not crumbling, and that the credit markets are improving.
By midday, the Dow was down 35.82, or 0.28 percent, at 12,570.01 in fluctuating trading, sometimes moving into positive territory.
Broader stock indicators also dipped slightly. The Standard & Poor's 500 index fell 0.67, or 0.05 percent, to 1,366.86, and the Nasdaq composite index fell 3.85, or 0.16 percent, to 2,357.55.
Government bonds edged higher as investors grew more uncertain about the economy and turned to safer assets. The yield on the 10-year Treasury note, which moves opposite its price, fell to 3.55 percent from 3.60 percent late Wednesday.
Crude oil rose 37 cents to $105.20 a barrel on the New York Mercantile Exchange, extending the surge it made a day earlier on the prospect of climbing demand for gasoline.
The dollar was mixed against other major currencies, while gold declined further below $900 an ounce.
The Russell 2000 index of smaller companies fell 1.59, or 0.22 percent, to 710.68.
Declining issues outnumbered advancers by about 8 to 7 on the New York Stock Exchange, where volume came to 523.9 million shares.
Tokyo's Nikkei index closed 1.52 percent higher. There were light losses in the European stock markets — London's FTSE fell 0.42 percent, Frankfurt's DAX lost 0.53 percent and Paris' CAC 40 slid 0.49 percent.
|
