Stocks Slip on Mixed Jobs Report 07/02 15:52
Stocks ended a tumultuous trading week with slight losses Thursday as
investors sought safety ahead of an extended holiday weekend.
NEW YORK (AP) -- Stocks ended a tumultuous trading week with slight losses
Thursday as investors sought safety ahead of an extended holiday weekend.
Investors bought at the opening of trading after a Labor Department report
on job creation suggested the economy was improving, though not so fast as to
raise the specter of inflation and higher interest rates. But the gains
vanished after a downbeat report from the International Monetary Fund on
Greece's finances as the country heads toward a vote on the country's financial
bailout this weekend.
It was a quiet close to an eventful week. Stocks plunged around the world
Monday over worries that a Greek default could spread losses throughout the
global financial system. A continued drop in Chinese stocks added to the fears,
as well as a statement from Puerto Rico's governor that the commonwealth would
not be able to pay back its large public debt.
Stocks rose a bit over the next two days, but by Thursday's close the
Standard and Poor's 500 index was still down 1.2 percent for the week, its
biggest weekly loss in three months.
U.S. markets will be closed Friday in observance of the Independence Day
The S&P 500 slipped 0.64 points, less than 0.1 percent, to 2,076.78. The Dow
Jones industrial average fell 27.80 points, or 0.2 percent, to 17,730.11. The
Nasdaq composite fell 3.91 points, less than 0.1 percent, to 5,009.21.
"We've got Greece, we've got China and Puerto Rico," said Sean Lynch,
co-head of global equity strategy for Wells Fargo Investment Institute.
"Investors want to take some risk off the table."
The jobs report showed payrolls rose by 223,000 in June and the unemployment
rate fell to a seven-year low of 5.3 percent. But the rate declined mostly
because many people abandoned their job hunts and were no longer counted as
The report also said average hourly earnings rose 2 percent, slightly lower
Investors bought bonds in anticipation that inflation, and interest rates,
will remain low. The price of the benchmark 10-year Treasury note rose, pushing
down its yield to 2.38 percent from 2.45 percent just before the jobs report
"There is no wage pressure and therefore no inflationary pressure. The Fed
should just let the economy run," said Steven Ricchiuto, chief economist at
Mizuho Securities. "Maybe instead of hiking rates in September, maybe it'll be
in December, maybe March."
The report from the IMF said Greece needs 50 billion euros ($56 billion) in
new financing from October through 2018, and more debt relief. The analysis was
made before Greece closed its banks and defaulted on IMF loans earlier this
week. The outlook is worse now.
Greece's government plans to put austerity measures to voters on Sunday
after European creditors rejected its latest proposal for a new aid program.
Six of the 10 sectors of the S&P 500 fell on Thursday. Stocks of utilities,
considered a conservative investment because of their big dividends, rose 1.4
Among stocks making big moves:
-- Health Net rose $6.51, or 10 percent, to $71.57 after Medicaid coverage
provider Centene said it will pay about $6.3 billion to buy the company. The
deal is more evidence of managed-care companies looking to bulk up in response
to the federal overhaul of health care.
-- U.S.-listed shares of BP rose $2.02, or 5 percent, to $41.29 after the
oil driller reached an $18.7 billion settlement with several states to resolve
litigation over the 2010 Gulf of Mexico oil spill.
-- Tesla Motors rose $10.87, or 4 percent, to $280.02 after announcing
second-quarter deliveries of its electric car surged 52 percent to set a
company record exceeding 11,000 vehicles. The stock has gained 26 percent so
far this year despite consistently losing money.
The price of oil erased early gains and closed down slightly after a closely
watched count of working drilling rigs had its first increase since December.
Benchmark U.S. crude fell 3 cents Thursday to close at $56.93 a barrel in New
York. Brent crude, a benchmark for international oils used by many U.S.
refineries, rose 6 cents to close at $62.07 a barrel in London.
In other futures trading on the New York Mercantile Exchange:
-- Wholesale gasoline rose 2.7 cents to close at $2.034 a gallon.
-- Heating oil rose 0.1 cent to close at $1.840 a gallon.
-- Natural gas rose 3.9 cents to close at $2.822 per 1,000 cubic feet.
Precious and industrial metals futures closed mostly lower. Gold lost $5.80
to settle at $1,163.50 an ounce, silver fell two cents to $15.54 an ounce and
copper was little changed at $2.63 a pound.