Robert Holmes
"We've now seen a consecutive string of low jobs numbers, which shows economic growth is, indeed, slowing," said Barry Hyman, an equity market strategist with EKN Financial. "The slowing job growth shows the dilemma of the Fed."
The Fed has hiked rates at 17 straight meetings going back to June 2004. During that time, the fed funds target rate has climbed 425 basis points from 1%. Bonds moved higher, with the 10-year Treasury yield dropping to 4.90% from 4.96% before the report. The dollar fell sharply against the yen and the euro. "There was a spike in the unemployment rate, which in particular helped people switch to the belief the Fed will be on hold," said John Canavan, market analyst with Stone & McCarthy Research Associates. "The yield curve is still inverted but flattening, but the decline in the yield is telling us much about the economy. The economy will remain slow enough to keep the inflation picture in check." Oil retreated as Tropical Storm Chris continued to weaken in the Caribbean. The storm is now considered not to be a hurricane threat, and has been downgraded to a tropical depression. In Nymex floor trading, September crude fell 70 cents to close at $74.76 a barrel. Among companies in the news. Hovnanian (HOV Quote - Cramer on HOV - Stock Picks) became the latest homebuilder to offer cautious guidance, saying its third-quarter earnings should be $1.10 to $1.20 a share, down from its prior forecast for a profit of $1.40 to $1.50. For the full year, the company slashed its earnings estimate to a range of $5 to $5.75 a share from its old outlook of $7.20 to $7.40. Hovnanian dropped 42 cents, or 1.4%, to $29.10, and the Philadelphia Housing Sector Index reversed an early 2% rise to finish unchanged.
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