Stocks Fall Amid Jobs Jitters; S&P Below 1,000
Stocks fell for a second straight session Thursday as tech stocks dragged after Cisco's tepid outlook and investors remained jittery ahead of tomorrow's jobs report.
The Dow Jones Industrial Averagelost 0.3 percent to close around 9,256. The S&P 500 shed 0.6 percent, finishing below 1,000 for the first time this week. The tech-heavy Nasdaq tumbled 1 percent.
This came after stocks lost about 0.4 percentWednesday as as disappointing readings on the service sector and employment situation, as well as a cautious outlook from Dow component P&G, fueled concerns about the economic recovery.
Cisco was what created some of the uncertainty in the tech sector after the networking-gear maker beat earnings expectations but said it's too soon to call a recovery. Still, its shares eked out a gain of 0.6 percent, while most of the rest of the tech sector finished lower.
In today's economic news, initial claims for unemployment benefits fell by 38,000 last week, much more than expected. The total number of people on unemployment benefits continued to rise, indicating that new layoffs are tapering off but job creation hasn't started to pick up yet.
This came after a pair of disappointing employment reports yesterday: ADP said 371,000 jobs were cutfrom private-sector payrolls in July, more than the 335,000-loss expected. And Challenger, Gray & Christmas reported that planned job cuts jumped 31 percent last month.
Jobs were at the forefront of traders' minds today as Friday brings the government's employment report. Economists expect it to show 320,000 jobs were dropped from nonfarm payrolls in July, following a loss of 467,000 in June.
There was even some buzz in the market today that the number could come in better than expected.
Financial stocks were the Dow's top percentage gainers after some encouraging analyst comments.
American Express rose 3.1 percent after analysts said credit problems may be stabilizing and one even upgraded its rating on the stock.
Bank of America gained 0.2 percent after Keefe, Bruyette & Woods said the bank will likely post mild losses in the second half and turn profitable in 2010.
AIG gained 2.4 percent, after being up more than 25 percent at one point, following a front-page story in the Wall Street Journal today that banks and lawyers could stand to collect nearly $1 billion in fees from the breakup of the insurer.
Former AIG CEO Hank Greenberg agreed to pay $15 millionto settle past accounting issues with the SEC.
CIT Group jumped 17 percent after the lender recently secured a $3 loan facility from bondholders.
Morgan Stanley slipped 1.6 percent after the brokerage agreed to pay $950 million to the government to repay its TARP loan, representing a 20-percent return for the government.
Ford dropped 4.4 percent, even after the Senate reached a deal late Wednesday to extend the "Cash for Clunkers" programthrough September, pumping another $2 billion into the program.
And General Motors jumped 21 percent, though that's only 11 cents, after the automaker announced plans for a plug-in rechargeable midsize SUV, to be released sometime in late 2010 or in 2011.
Retailers released their July chain-store sales this morning, falling short of already low expectations.
But retail stocks were higher, with Macy's and Gap up more than 5 percent.
After the bell today, we'll hear from CBS , Nvidia, and VeriSign, among others.
Still to Come:
FRIDAY: July jobs report; consumer credit; Earnings from Liberty Media
Send comments to firstname.lastname@example.org.