The release of a fairly friendly September
jobs report this morning helped out the markets for about an hour and then the reality check of earnings warnings settled in and quickly pulled down most major indices.
Nasdaq Composite Index took the plunge into the red first, then the
Dow Jones Industrial Average followed it down. Both were lately off their lows but heading down.
Earnings warnings continue to flutter in. Last night a few more from the tech sector hit the Street.
Companies warning last night included Web site designer
, data storage and imaging systems manufacturer
, Internet-based software firm
and e-commerce software provider
Concord Communications was lately losing more than half of its market cap.
Other big tech losers for the day included data storage and optical networking firm
, which warned of lower-than-expected third-quarter sales and earnings last night and announced the resignation of its president and chief operating officer this morning. The company's stock was getting slaughtered, off 28%.
Tech bellwethers like
were adding pressure to the Comp.
The Dow was struggling most under the weight of
, which were shaving more than 50 points from the index.
Traders said the market probably won't regain any uphill stride until the earnings warnings flow dries up, oil prices show a steady drop and companies begin to report solid third-quarter earnings and positive outlooks for coming quarters. (Earnings season will start to pick up next week.)
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The good news is that oil stocks were playing in positive territory again this morning. The bad news: just about everything else was in the red.
The energy stocks were getting a lift from a rebound in oil prices today. Oil prices were clawing their way back up after falling sharply Thursday on
news that the government had awarded contracts for all 30 million barrels of stockpiled crude oil offered to the refineries. The
American Stock Exchange Oil & Gas Index
was up 0.8%, while the
American Stock Exchange Natural Gas Index
was 1.5% higher.
Financials were tanking today. The
American Stock Exchange Broker/Dealer Index
lately tumbled 3.9%, while the
Philadelphia Stock Exchange/KBW Bank Index
was down 3.4%.
Philadelphia Stock Exchange Semiconductor Index
lost 2.7%. The sector can thank
for that one. It warned of lower-than-expected sales and earnings.
S&P Retail Index
fell 2.7%. The
Nasdaq Biotechnology Index
was down 2.6%.
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Bonds have pared their losses thanks to the weakness in stocks. Falling stock prices are seen as a leading indicator of economic activity. They also make bonds more appealing as an alternative investment.
Earlier, bond prices fell as investors concluded that the September
) makes the
Fed less likely to ease up on interest rates in the near future.
The September jobs report measured a decline in the unemployment rate to 3.9% -- matching the 30-year low it hit in April -- from 4.1% in August. A low unemployment rate is a key indicator of a healthy economy, one that does not require assistance from the Fed in the form of easier monetary policy.
Also indicating that the economy is strong, the employment report counted 252,000 new nonfarm jobs in September. Netting out the loss of 27,000 temporary Census jobs and the return of 75,000 strikers, the underlying increase was 204,000, in line with the recent trend. A shift in monetary policy is unlikely to occur unless there is a pronounced slowdown in the pace of job creation.
The benchmark 10-year
Treasury note lately was unchanged at 99 6/32, yielding at 5.856%.
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