July's strong jobs report threw cold water on stocks this morning, hauling the
Dow Jones Industrial Average
into negative territory. But most traders were too busy worrying about a potential interest-rate hike later this month to fret about the 60-point drop, and many were relieved the damage wasn't worse.
The downturn "is really not monumental. One would have expected
a drop of 100 to 200 points," said Paul Rich, an equity trader at
. "It really underscores an unusually strong market. We are going to
lie around these levels for a while, maybe through August. It all depends on the
," said Rich.
Indeed, with the Federal Reserve's Aug. 24 meeting looming, trading has been cautious and the general consensus is that the market is in the process of discounting a rate hike. The thumping that stocks have taken in the past week certainly supports the idea.
Amid an overall slump, technology issues were holding steady. The tech-heavy
Nasdaq Composite Index
was up 5.5 to 2571.3 while
The Street.com Internet Sector
was slipping despite a lift from
, which was up 4%, and
, up 2.6%. The
was down 3.82 to 509.73.
Many market watchers are bracing now for bad news. "I think today was the confirming day for the timing of the rate hike. The
employment numbers confirm everyone's feeling that the Fed will take action on Aug. 24, probably with a 25-basis-point rate hike," said John Eade, director of research at
But many think the buck won't stop at the August meeting. Worry about another spike in rates at the Fed's October meeting is already taking hold. "I think the concern will come back up and there could be another move later this fall. The number we saw was strong enough that the door is not closed yet. We need more data," Eade said, referring to the
Consumer Price Index
report to be released Aug. 17.
The Dow was down 64 to 10,729 while the broader
was off 8.3 to 1305. The small-cap
was down 0.84 to 428.
, decliners were beating advancers 1,864 to 894 on volume of 387 million shares, while on the
Nasdaq Stock Market
laggards led leaders 1,871 to 1,632 on 514 millon shares. New lows were at 134 on the Big Board, compared with 30 new highs, while on the Nasdaq there were 29 new highs and 64 new lows.
The benchmark 30-year Treasury was down 1 5/32, its yield at 6.135%.
Friday's Midday Watchlist
Earnings estimates from First Call; new highs and lows on a closing basis unless otherwise specified. Earnings reported on a diluted basis unless otherwise specified.
The most movingest securities Friday were American depository receipts (see below), especially those of Swedish truckmaker
. Scania was up 7 1/16, or 23.4%, to 37 1/4 after rival
made a bid to acquire the 78.4% of the company it doesn't already own. Volvo -- which was down 2 5/8, or 8.8%, to 27 7/16 on the news -- is offering nearly $39 (315 kronor) in cash for each Scania share or a stock swap of six new Volvo shares for every five Scania shares.
, Scania's controlling shareholder, has agreed to sell its stake.
-- whose stock is manufactured back here in the good old USA -- was free falling 5 3/16, or 14.2%, to 31 5/16 after it said it will recall its Rotablator RotaLink Advancer and RotaLink Plus rotational atherectomy systems, which, when they work, open constricted blood vessels by drilling away plaque from the vessel walls. Boston Scientific has sold about $60 million worth of those two products in the first half of this year.
Mergers, acquisitions and joint ventures
America Online signed distribution and co-branding agreements for its instant messaging software with Internet service providers
. Earthlink was up 4 3/8, or 11.8%, to 41 5/8 on the news, while Mindspring was up 2 11/16, or 10.3%, to 28 15/16. AOL was up 3 3/8, or 4%, 87 5/16.
ADRs were off 5/8 to 40 1/8 after it confirmed plans to buy U.K. mobile telephone firm
for about $11.2 billion. Telekom will also assume about $2.4 billion in One2One debt.
were off 3/16 to 81 1/4 after the company said it was in talks to sell its
unit, which makes mobile phone battery chargers, as part of its plan to focus on core telecommunications and Internet technologies.
Earnings/revenue reports and previews
was up 3, or 13.3%, to 25 9/16 after last night posting a narrower-than-expected second-quarter loss. The company said it lost 45 cents a share for the quarter, 2 cents thinner than the five-analyst
was sinking 2 5/8, or 10.8%, to 21 5/8 after it warned last night that its fourth-quarter earnings would fall as much as 5 cents shy of the 16-analyst estimate. The company attributed weaker results to sluggish revenue growth and the delay of several end-of-the-quarter transactions. Today the analysts weighed in:
J. P. Morgan
cut Sterling to long-term buy from buy, and
Credit Suisse First Boston
lowered it to hold from buy.
was dropping 2 7/8, or 5.4%, to 50 9/16 despite posting fourth-quarter earnings of 60 cents a share last night, 3 cents above the 19-analyst estimate and up from the year-ago 54 cents.
raised the stock to buy from neutral today, but that wasn't helping matters any.
ADRs of U.K. cable firm
were kerplunking down 2 7/8, or 7%, to 38 3/4 after the company said yesterday that its second-quarter loss had widened 56% because of higher accounting charges and interest payments for acquisitions. Telewest said it expects its losses to peak early next year as it launches its high-speed Internet and multimedia services
was shooting up 3 3/4, or 16.3%, to 26 3/4 after the company said last night that it had received an unsolicited merger offer and retained
Donaldson Lufkin & Jenrette
to help it consider its alternatives. The news came as Terra Nova reported lower-than-expected second-quarter earnings of 68 cents a share, worse than the four-analyst estimate of 71 cents and a penny less than the year-ago 69 cents. The company also said last night that it is in the final stage of talks to acquire a U.S. company.
dual ADRs were falling in New York despite the company's posting an 8% rise in second-quarter pretax profit. Unilever is a joint venture of the Netherlands'
and the U.K.'s
-- the Dutch ADRs were lately off 2 1/16 to 71 15/16, while the British ones were down 1 3/16 to 39 1/8. Credit Suisse First Boston reiterated its hold rating on Unilever today.
Offerings and stock actions
was rising 1 1/4, or 10.4%, to 13 1/4 in its first day of trading, having been priced last night at $12 a share by lead underwriter
E-commerce investment group
was continuing to tack on points the day after its trading debut, lately up 5 5/8, or 23/1%, to 30 1/16.
Diversified holding company
was up 1 13/16 to 72 13/16 after
raised it to near-term buy from neutral.
Natural gas and electricity company
was dropping 5/16 to 18 5/16 after
Deutsche Banc Alex. Brown
cut it to market perform from buy.
was advancing 3 5/16, or 2.6%, to 121 5/8 after
raised it to its recommended list from market outperformer. The upgrade comes at a time when Yahoo! is trading at about a 45% discount to its 12-month intraday high of 244, set back on April 6.
Decking products maker
was banging a gong this morning ahead of its earnings report on Monday. Trex lately was up 2 1/8, or 8.9%, to 26 1/16.