U.S. stocks stumble on subpar jobs report

U.S. stock fell on Friday after the government said that far fewer Americans found jobs in March than estimated. Payrolls increased by 88,000 last month following two others this week that also cast a negative view on the labor market.

By Kate Gibson
April 5, 2013, 2:21 p.m. EDT
Market Watch

NEW YORK (MarketWatch) — U.S. stocks fell on Friday, putting them in line for their worst week this year, after the government said the far fewer Americans found jobs in March than estimated.

“Welcome back to tempered expectations. We don’t think the wheels have fallen off the economy, but we don’t think it ever had the momentum that some people believed,” said Bruce McCain, chief investment strategist at Key Private Bank in Cleveland.

“That’s what makes for market corrections,” he added.

Payrolls increased by 88,000 last month following a revised 268,000 gain in February, with the disappointing report following two others this week that also cast a negative view on the labor market.

“We can now add the monthly employment report to the growing list of data points that simply haven’t met expectations,” Dan Greenhaus, chief global strategist at BTIG LLC in New York, said in emailed comments.

After falling 171 points, the Dow Jones Industrial Average DJIA -0.28% was recently off 89.19 points, or 0.6%, to 14,516.76, off 0.4% for the week.

Twenty-two of the blue-chip index’s 30 components lost ground, including Alcoa Inc. AA +0.12% , which unofficially starts the first-quarter earnings-reporting season on Monday, after the market close.

Down 1.4% for the week, the S&P 500 index SPX -0.43% declined 12.49 points, or 0.8%, to 1,547.49, with technology companies hardest hit and utilities the best performing of its 10 major sectors.

F5 Networks Inc. FFIV +0.38% plummeted 19% a day after projecting second-quarter earnings and revenue well below consensus estimates.

The Nasdaq Composite COMP -0.66% lost 34.94 points, or 1.1%, to 3,190.03, with the technology-heavy index off 2.4% for the week.

Both the Dow and S&P are in line for their biggest weekly losses since the week ending Dec. 28, 2012, while the Nasdaq is looking at its biggest weekly drop since the period ending Nov. 9, 2012.

For every two stocks rising roughly three fell on the New York Stock Exchange, where 366 million shares traded as of 2:05 p.m. Eastern. Composite volume surpassed 2.1 billion.

The recent series of less-than-hoped for economic reports increases the odds that the Federal Reserve will stay the course and continue its monthly purchases of $85 billion of Treasurys and mortgage-backed securities.

The jobs number “is truly disappointing and suggests we’re a long way from the normalized growth the Fed in particular seems to be striving for,” said McCain.

The Fed’s bond-buying program, along with measures from other global central banks, are among the forces that have helped drive up the price of equities this year, with the S&P 500 up 8.3% for the year.

Wall Street stocks rose on Thursday as investors cheered a massive stimulus program announced by Japan, helping it brush aside downbeat news on jobless claims. The Bank of Japan’s move to begin on a course of record easing had it lining up with the policies of the U.S. central bank, the European Central Bank and the Bank of England.

Stocks in Japan extended a rally on Friday, with the Nikkei 225 index JP:NIK +1.58% finishing up 3.5% for the week on the heels of the unprecedented stimulus. The dollar USDJPY +1.39% stretched its climb versus the Japanese yen, though the greenback posted losses against most other major currencies following the weak jobs report.

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