Enthusiasm about a solid October jobs report quickly faded on Wall Street Friday. Stocks drifted lower as companies began to assess the potential cost of Superstorm Sandy.
Insurers plunged on expectations that losses from the catastrophe will eat into their fourth-quarter earnings. AIG fell 7 percent, Genworth Financial 3 percent, Arch Capital Group 4 percent and Hartford Financial Services Group 3 percent.
In the last big piece of economic news before Tuesday's presidential election, the Labor Department said employers added 171,000 jobs last month, while the unemployment rate ticked up to 7.9 percent. More jobs were added in the previous two months than was first reported, the government said.The economy is the top issue in the election, but few expect the latest jobs numbers â¿¿ solid, but not great â¿¿ will sway many voters. Stocks in Europe rose after the report was released at 8:30 a.m. Eastern time, but fell back after the U.S. rally faded. The Dow Jones industrial average rose as much as 57 points in the first minute of trading, then turned negative before a half-hour had passed. A sell-off in the last two hours of trading widened the losses. The Dow was down 134 points at 13,098 shortly before the close of trading. The Standard & Poor's 500 index fell 13 to 1,414. The Nasdaq composite average lost 36 to 2,983. Several analysts warned that the storm could take a toll on the earnings of insurers. Raymond James analysts lowered their earnings estimates for Allstate. Barclays analysts cut their earnings estimates for Hartford Financial. The chairman of Hartford, Liam McGee, told investors on a conference call that it was too early to say what the storm will end up costing. "It's much too early for us to provide data with any level of certainty," McGee said. It wasn't until Thursday that adjustors were able to view the damage to Long Island, one of the hardest-hit areas, he said.