Markets

Stocks drop after weak jobs report

Stocks are reversing lower after a dismal jobs report.

S&P 500 futures declined more than 1 percent after being up over half a percent before the news. Europe's gains were cut in half and Asia was little-changed in the overnight session. Bonds and gold are rallying.

The Labor Department said U.S. non-farm payrolls grew by 142,000 last month, well below forecasts for a 205,000 gain. July and August were revised lower as well.

The number will be viewed as a sign that the Federal Reserve is less willing to raise interest rates. It also suggests that weakness in emerging markets and junk bonds are spreading to the broader economy.

The news comes as the S&P 500 tries to bounce from long-term lows. It's churned in a range since late August as the market digests weakness in countries like China. The big question now facing investors is whether stocks will regain their footing into year-end or whether global problems will spread to the United States.

There's also been a general lack of leadership among individual groups or indexes, according to optionMONSTER's proprietary researchLAB market scanner. Health care, the strongest sector for years, has lagged by a wide margin in the last two weeks.

In company-specific news today, Micron Technology rose more than 5 percent after earnings and revenue beat expectations. Progress Software dropped 14 percent on weak top-line results and guidance.

Aside from non-farm payrolls, factory orders at due at 10 a.m. ET and Federal Reserve Vice Chair Stanley Fischer will give a speech at 1:30 p.m. ET. Next week's agenda is relatively light, though quarterly earnings start to flow.

Gold rallied almost 2 percent on the news and bonds rose to their highest level in more than a month. The U.S. dollar plunged against the euro and Japanese yen.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Copyright © 2010 OptionMonster® Holdings, Inc. All Rights Reserved.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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