NST Online Business Times : latest
NST Online Business Times : latest |
| US stocks sink despite jobs data Posted: 07 Oct 2011 06:35 PM PDT NEW YORK: Wall Street stocks closed in the red Friday after a credit downgrade on Italy and Spain snuffed out a rally on better-than-expected US jobs numbers. The Dow Jones Industrial Average shed 20.21 points (0.18 per cent) to finish at 11,103.12. The broader S&P 500 fell 9.51 points (0.82 per cent) to 1,155.46, while the tech-heavy Nasdaq Composite lost 27.47 points (1.10 per cent) to 2,479.35. Stocks had posted moderate gains in early trade, buoyed by the jobs report that showed the economy created a net non-farm 103,000 jobs in September, more than analysts anticipated, but not enough to lower the unemployment rate stuck at 9.1 per cent for three months.
The July payrolls totalled 127,000, not the 85,000 initially estimated, while August was revised from zero to 57,000. But equity markets turned south shortly after noon on news that Fitch Ratings had downgraded the debt of Italy and Spain, reflecting risks associated with the eurozone sovereign debt crisis gripping Greece, Ireland and Portugal. "Equity markets snapped a three-day winning streak as a better-than-expected non-farm payrolls report could not offset more disappointing news out of Europe," Charles Schwab analysts said in a note. "Debt crisis fears were exacerbated by Fitch cutting their ratings on Spanish and Italian debt." "The economy looks a bit less recession-prone but jobs trends still are not very good. We are averaging 119,000 jobs per month this year," said Robert Brusca, chief economist at FAO Economics. Sentiment initially found some support from across the Atlantic, after the European Commission said it would offer a framework in "coming days" for EU nations to recapitalise banks mired in the eurozone debt crisis. But the Fitch downgrades of Italy and Spain, the eurozone's third- and fourth-largest economies, took the wind out of the market's sails, hammering US financial stocks. Bank of America plunged 6.1 per cent, Citigroup shed 5.3 per cent and Wells Fargo lost 3.3 per cent. Wall Street investment banks Goldman Sachs and Morgan Stanley tumbled 5.4 per cent and 6.2 per cent, respectively. Apple was down 2.0 per cent, two days after the death of its visionary co-founder Steve Jobs after a long battle with pancreatic cancer. -- AFP |
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