A disappointing report on the jobs market dampened investor
confidence, dragging the major indices into negative territory. The
S&P 500 logged its worst weekly decline of the year, following
a series of weaker-than-expected numbers from the jobs market. The
government jobs report showed that U.S companies are hiring at the
slowest pace in nine months. Back-to-back dismal jobs reports have
sparked concerns about the health of the economy. However, the
energy and utilities sectors still managed a green finish on the
S&P 500. Technology stocks were the biggest
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The Dow Jones Industrial Average (DJI) lost 0.3% to close the day
at 14,565.25. The S&P 500 declined 0.4% to finish Friday's
trading session at 1,553.28. The tech-laden Nasdaq Composite Index
fell 0.7% to end at 3,203.86. The fear-gauge CBOE Volatility Index
(VIX) inched up 0.2% to settle at 13.92. Consolidated volumes on
the New York Stock Exchange, American Stock Exchange and Nasdaq
were roughly 6.4 billion shares, lower than 2012's daily average of
6.45 billion shares. Declining stocks outnumbered the advancers.
For the 45% that advanced, 52% declined.
Benchmarks began Friday's trading session in a bearish mood and
the Dow Jones dropped as much as 171 points in the early part of
the trading session. But stocks slowly trimmed losses in the later
part of the trading session. A series of disappointing report on
the jobs front had dragged benchmarks lower in the previous week.
The S&P 500 declined 1%, the Dow Jones dropped 0.1% and the
Nasdaq lost 2% over the week. Investors are also concerned about
the earnings season which will get underway this week.
According to the U.S. Bureau of Labor Statistics, non-farm payroll
employment increased 88,000 in the month of March. This was well
below the consensus estimate of 198,000. In contrast, U.S.
companies had added 268,000 jobs in February. Employment edged up
in professional and business services and in health care but
declined in retail trade. Professional and business services added
51,000 jobs, health care accounted for 23,000 more jobs whereas
employment in construction edged up 23,000. The report revealed
employment increased at its slowest pace in nine months. However,
unemployment increased to 7.6% from February's figure of
7.7%. This was primarily a result of people withdrawing from
the jobs market.
The earnings season will get underway from this week. Alcoa Inc
(NYSE: AA ) will be
the first Dow company to kick off the earning season. Alcoa is
scheduled to report its first-quarter financial report after the
close on Monday. According to S&P Capital IQ, analysts believe
that profits of S&P 500 companies will increase by 0.6% in the
first-quarter on a year-over-year basis. Meanwhile, consumer credit
increased in February. Revolving credit increased 0.75% annually
whereas non-revolving surged 11%.
The utilities sector was the biggest gainer among the S&P 500
industry groups and the Utilities SPDR (XLU) gained 0.4%. Stocks
such as Duke Energy Corp (NYSE: DUK ), Dominion
Resources, Inc. (NYSE: D ), NextEra Energy, Inc.
(NYSE: NEE ), Exelon
Corporation (NYSE: EXC ) and El Paso
Electric Company (NYSE: EE ) rose 0.4%, 0.2%,
0.4%, 1.2% and 0.8%, respectively.
The technology sector had a bad day and the Technology SPDR (XLK)
lost 0.8%. Stocks such as Apple Inc. (NASDAQ: AAPL ),
Hewlett-Packard Company (NYSE: HPQ ), Intel
Corporation (NASDAQ: INTC ), Google Inc
(NASDAQ: GOOG ) and
Yahoo! Inc. (NASDAQ: YHOO ) slipped 1.1%,
1.5%, 0.9%, 1.5% and 0.9%, respectively.