February 11, 2009 2:03 PM
Stocks End Lower For Second Day Ahead Of Friday's Jobs Report
NEW YORK (MarketWatch) -- U.S. stocks on Thursday thudded lower for a second day, with the Dow Jones Industrial Average closing below 9,000 for the first time since Oct. 29, as investors braced for the October jobs report and a likely jump in the unemployment rate.
"Fear of a deep recession with the headline bad employment number tomorrow morning, making this a one-way street today," said Elliot Spar, option/market strategist, Stifel Nicolaus.
After dropping nearly 500 points in afternoon trade, the Dow Jones Industrial Average ended at 8,695.75, off 443.48 points, or 4.9%.
All of the Dow's 30 components finished in the red with losses led by General Motors Corp. , down 13.7%.
Both GM and Ford Motor Co. report third-quarter results Friday. .
Shares of Wal-Mart Stores Inc. fell the least, down 1.2%.
"The consumer is clearly suffering and discretionary spending is clearly suffering. However, it is not a disaster -- you see more people at Wal-Mart than you used to," said Marino Marin, managing director, Gruppo Levey & Co.
Energy, financials and industrials fronted sector declines among the S&P 500 Index's 10 industry groups.
Among the more noteworthy energy-firm decliners, Consol Energy Inc. fell 20.3%.
Shares of Las Vegas Sands Corp. plunged 32.7% after the casino company said in a regulatory filing it might default on its debt and face possible bankruptcy.
The S&P 500 shed 47.89 points, or 5%, to 904.88, while the Nasdaq Composite Index declined 72.94 points, or 4.3%, to 1,608.7.
"The next step for the markets is to determine the depth and duration of the economic downturn. Data need not get better to spark a rally, they need only stop getting worse," said Tony Crescenzi, bond market strategist at Miller Tabak & Co.
Volume on the New York Stock Exchange topped 1.5 billion, with declining stocks outpacing advancers 5 to 1. On the Nasdaq, more than 1 million shares exchanged hands, with decliners outpacing advancers roughly 11 to 3.
Crude spills
On the New York Mercantile Exchange, crude futures declined 7%, with oil for December delivery dropping $4.53 to finish at $60.77 a barrel, after hitting a 19-month low of $60.16 a barrel during the session. .
Gold futures fell $10.20 to end at $732.20 an ounce, after jumping to $761.30 earlier on.
Treasury prices gained, with the 2-year yields falling to their lowest level since March, when the collapse of Bear Sterns sent investors fleeing to government debt.
The Labor Department reported the number collecting jobless benefits hit a 25-year high, while first-time unemployment claims fell last week. The data came ahead of Friday's jobs report for October, with the unemployment rate expected to rise to 6.3%. .
"The 'trade in waiting' will likely depend on tomorrow's employment report for the month of October, which will probably offer the greatest evidence as to why the Democrats won this week. It's the economy, stupid!" said Kevin Giddis, managing director of fixed income for Morgan Keegan & Co.
In a separate report, the government said U.S. companies cut back employees' hours in the third quarter, with productivity growth up more than anticipated. .
Several retailers released downbeat sales for October.
Costco Wholesale Corp. said same-store sales fell 1% in October, while Limited Brands Inc. reported same-store sales dropped 9% and Big Lots Inc. cut its estimate of third-quarter earnings.
Wal-Mart, however, posted better October sales than forecast.
Shares of technology bellwether Cisco Systems Inc. fell 2.6%, one day after the world's biggest computer-networking equipment maker reported flat net income and warned of slowing sales.
News Corp. shares slumped 16.3% after the media giant reported a 30% fall in fiscal first-quarter profit and cut its annual earnings outlook.
News Corp. is the paren company of MarketWatch, the publisher of this report.
Toyota Motor Corp. dropped 16.5% after the Japanese automaker cut its earnings outlook.
Wells Fargo & Co. traded 9.2% lower on its plan to sell $10 billion in common stock.
Overseas, the Bank of England cut interest rates by 1.5 percentage points. The European Central Bank also cut rates, but by a more modest half point.
European stocks traded sharply lower. .
Asian markets also slumped as investors turned their attention back to the weakening global economy. .
U.S. stocks tumbled Wednesday, suffering their worst-ever percentage losses in the day after a presidential election, as the Dow Jones Industrial Average dropped 486 points, the S&P 500 lost 52 points and the Nasdaq dropped 98 points.
By Kate Gibson
"Fear of a deep recession with the headline bad employment number tomorrow morning, making this a one-way street today," said Elliot Spar, option/market strategist, Stifel Nicolaus.
After dropping nearly 500 points in afternoon trade, the Dow Jones Industrial Average ended at 8,695.75, off 443.48 points, or 4.9%.
All of the Dow's 30 components finished in the red with losses led by General Motors Corp. , down 13.7%.
Both GM and Ford Motor Co. report third-quarter results Friday. .
Shares of Wal-Mart Stores Inc. fell the least, down 1.2%.
"The consumer is clearly suffering and discretionary spending is clearly suffering. However, it is not a disaster -- you see more people at Wal-Mart than you used to," said Marino Marin, managing director, Gruppo Levey & Co.
Energy, financials and industrials fronted sector declines among the S&P 500 Index's 10 industry groups.
Among the more noteworthy energy-firm decliners, Consol Energy Inc. fell 20.3%.
Shares of Las Vegas Sands Corp. plunged 32.7% after the casino company said in a regulatory filing it might default on its debt and face possible bankruptcy.
The S&P 500 shed 47.89 points, or 5%, to 904.88, while the Nasdaq Composite Index declined 72.94 points, or 4.3%, to 1,608.7.
"The next step for the markets is to determine the depth and duration of the economic downturn. Data need not get better to spark a rally, they need only stop getting worse," said Tony Crescenzi, bond market strategist at Miller Tabak & Co.
Volume on the New York Stock Exchange topped 1.5 billion, with declining stocks outpacing advancers 5 to 1. On the Nasdaq, more than 1 million shares exchanged hands, with decliners outpacing advancers roughly 11 to 3.
Crude spills
On the New York Mercantile Exchange, crude futures declined 7%, with oil for December delivery dropping $4.53 to finish at $60.77 a barrel, after hitting a 19-month low of $60.16 a barrel during the session. .
Gold futures fell $10.20 to end at $732.20 an ounce, after jumping to $761.30 earlier on.
Treasury prices gained, with the 2-year yields falling to their lowest level since March, when the collapse of Bear Sterns sent investors fleeing to government debt.
The Labor Department reported the number collecting jobless benefits hit a 25-year high, while first-time unemployment claims fell last week. The data came ahead of Friday's jobs report for October, with the unemployment rate expected to rise to 6.3%. .
"The 'trade in waiting' will likely depend on tomorrow's employment report for the month of October, which will probably offer the greatest evidence as to why the Democrats won this week. It's the economy, stupid!" said Kevin Giddis, managing director of fixed income for Morgan Keegan & Co.
In a separate report, the government said U.S. companies cut back employees' hours in the third quarter, with productivity growth up more than anticipated. .
Several retailers released downbeat sales for October.
Costco Wholesale Corp. said same-store sales fell 1% in October, while Limited Brands Inc. reported same-store sales dropped 9% and Big Lots Inc. cut its estimate of third-quarter earnings.
Wal-Mart, however, posted better October sales than forecast.
Shares of technology bellwether Cisco Systems Inc. fell 2.6%, one day after the world's biggest computer-networking equipment maker reported flat net income and warned of slowing sales.
News Corp. shares slumped 16.3% after the media giant reported a 30% fall in fiscal first-quarter profit and cut its annual earnings outlook.
News Corp. is the paren company of MarketWatch, the publisher of this report.
Toyota Motor Corp. dropped 16.5% after the Japanese automaker cut its earnings outlook.
Wells Fargo & Co. traded 9.2% lower on its plan to sell $10 billion in common stock.
Overseas, the Bank of England cut interest rates by 1.5 percentage points. The European Central Bank also cut rates, but by a more modest half point.
European stocks traded sharply lower. .
Asian markets also slumped as investors turned their attention back to the weakening global economy. .
U.S. stocks tumbled Wednesday, suffering their worst-ever percentage losses in the day after a presidential election, as the Dow Jones Industrial Average dropped 486 points, the S&P 500 lost 52 points and the Nasdaq dropped 98 points.
By Kate Gibson
MarketWatch
