Business
Jobless data sends stocks reeling; Dow loses 223
NEW YORK (AP) — The stock market found little to celebrate heading into the long holiday weekend.
Major stock indexes fell more than 2.6 percent Thursday, pushing the Dow Jones industrials to their lowest level in six weeks, after the government said the unemployment rate hit a 26-year high and employers cut far more jobs than expected.
The data was especially disappointing since it broke a trend of four straight months of improvement in job losses. The report — one of the most closely watched gauges of the economy’s health — delivered the latest blow to the market’s already waning confidence.
Investor optimism has been shaken in recent weeks amid a barrage of mixed economic reports, making for an erratic market.
This past week was no exception. Stocks rose Monday, then erased nearly all their gains the following day after a report showing an unexpected drop in consumer confidence.
On Wednesday the market bounced back after getting some reassuring data on manufacturing and housing, only to tumble again on Thursday on the disappointing jobs report.
“There’s not a lot of conviction on either side,” said Jill Evans, co-portfolio manager of the Alpine Dynamic Dividend Fund.
The Dow Jones industrials lost 223.32, or 2.6 percent, to 8,280.74, the lowest close since May 22. It was the average’s worst day since April 20.
The Standard & Poor’s 500 index fell 26.91, or 2.9 percent, to 896.42 and the Nasdaq composite index fell 49.20, or 2.7 percent, to 1,796.52.
Trading on the New York Stock Exchange was extended until 4:15 p.m. Eastern time in order to execute customer orders impacted by system irregularities, an NYSE spokeswoman said.
The stock market rallied furiously this spring off of 12-year lows beginning in early March on hopes for a recovery, but the upward momentum has stalled since mid-June as doubts grow about whether the economy had really found a bottom.
Since hitting multi-month highs on June 12, the Dow has fallen a total of 5.9 percent, while the S&P 500 index has lost 5.3 percent.
“There’s more and more evidence mounting against this rally continuing,” said Doug De Groote, a managing director at United Wealth Management. Consumers are likely to lead the nation out of the ongoing recession, but that won’t happen if more people are losing their jobs, he said.
Stocks started the day down and stayed there after the Labor Department reported that employers slashed 467,000 jobs in June, far worse than the 363,000 that economists expected and a grim signal that the path to recovery will be bumpy. The unemployment rate rose to 9.5 percent from 9.4 percent the month before.
Overseas markets also fell Thursday after a report showed unemployment in Europe rose to a 10-year high in May.
As stock prices fell across the board, other signs of investor unease emerged. Treasury prices rose, driving the yield on the 10-year note down to 3.50 percent from 3.54 percent late Wednesday.
Meanwhile a gauge of volatility in the stock market, the Chicago Board Options Exchange Volatility Index, or VIX, rose 1.73, or 6.6 percent, to 27.95 Thursday afternoon.
Declining issues outnumbered advancers by about 5 to 1 on the New York Stock Exchange.
Volume came to a relatively low 733.6 million shares ahead of the holiday weekend, compared with 951.1 million shares traded at the same point Wednesday. Markets will be closed Friday in observance of the Independence Day holiday.
Light volume can lead to more volatile swings in trading.
For the week, the Dow finished down 1.9 percent; the S&P 500 lost 2.5 percent; and the Nasdaq fell 2.3 percent.
An upbeat report about May factory orders was not enough to boost traders’ confidence amid the weak employment numbers. The Commerce Department said total orders rose 1.2 percent in May, better than the 0.8 percent increase that economists had expected.
Markets kicked off the third quarter on Wednesday with gains as investors found encouragement in a report showing more stable manufacturing activity and another indicating the fourth straight monthly rise in pending home sales.
Next week, the focus will shift to companies’ quarterly earnings, which kick off Wednesday with a report from aluminum producer Aloca Inc.
The dollar rose against most other major currencies, while gold prices fell.
The Russell 2000 index of smaller companies fell 20.25, or 3.9 percent, to 497.21.
Overseas, Japan’s Nikkei stock average fell 0.6 percent. Britain’s FTSE 100 fell 2.5 percent, Germany’s DAX index declined 3.8 percent, and France’s CAC-40 fell 3.1 percent.
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Exxon Mobil posts lowest annual profit since ’02
EW YORK (AP) — Exxon Mobil’s earnings were cut by more than half to $19.3 billion in 2009, the lowest total in seven years, as company refineries struggled with a plunge in fuel consumption around the world.
But the world’s largest publicly traded oil company remains the profit champ among U.S. public companies. Wal-Mart is expected to earn $14 billion for the year ended Jan. 31, and Microsoft earned $14.6 billion in the fiscal year ended in June 2009.
Exxon’s results have swung with the price of oil and the impact of the global recession. When oil spiked above $147 a barrel in mid-2008, Exxon set ever-higher marks for earnings by a U.S. company. Then oil prices plummeted, and Exxon suffered a yearlong hangover that included its smallest quarterly earnings in several years.
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Toyota tells dealers parts on way to fix pedals
WASHINGTON (AP) — Toyota Motor Corp. said Monday its dealers should get parts to fix a sticky gas pedal problem by the end of this week as the automaker apologized to customers and tried to bring an end to a recall that has affected 4.2 million vehicles worldwide.
The company said in a statement that it has begun shipping parts and is training dealers on the repairs. Some dealers will stay open around the clock to fix the 2.3 million cars and trucks affected by the recall in the U.S.
Technical bulletins on how to install the new parts should arrive at dealers by midweek, the company told dealers in an e-mail. It was not clear exactly when repairs would start, although dealers have said they’ll begin as soon as possible.
The automaker also said Monday it would suspend production of eight U.S. models affected by the recall this week, with factories restarting on Feb. 8.
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Apple introduces new $499 iPad tablet computer
SAN FRANCISCO (AP) — Apple CEO Steve Jobs unveiled the company’s much-anticipated iPad tablet computer Wednesday, calling it a new third category of mobile device that is neither smart phone nor laptop, but something in between.
The iPad will start at $499, a price tag far below the $1,000 that some analysts were expecting. But Apple must still persuade recession-weary consumers who already have other devices to open their wallets yet again. Apple plans to begin selling the iPad in two months.
Jobs said the device would be useful for reading books, playing games or watching video, describing it as “so much more intimate than a laptop and so much more capable than a smart phone.”
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Dealers swamped by worried Toyota drivers
NEW YORK (AP) — Toyota dealers across the country were swamped with calls Wednesday from concerned drivers but had few answers a day after the company announced it would stop selling and building eight models because of faulty gas pedals.
Toyota insisted the problem — sudden, uncontrolled acceleration — was “rare and infrequent” and said dealers should deal with customers “on a case-by-case basis.” But drivers of Toyotas and those who share the road with them were left with uncertainty.
In an unprecedented move, the company said late Tuesday it would halt sales for the eight models — which make up more than half of Toyota’s U.S. sales volume — to fix the gas pedals. Last week, Toyota issued a recall for the same eight models, affecting 2.3 million vehicles.
A private firm said it had identified 275 crashes and 18 deaths because of sudden, uncontrollable acceleration in Toyotas since 1999.
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Apple unveils $499 tablet, $629 with AT&T data
SAN FRANCISCO (AP) — Apple Inc. will sell the newly unveiled tablet-style iPad starting at $499, a price tag far below the $1,000 that some analysts were expecting.
The iPad, which is larger in size but similar in design to Apple’s popular iPhone, was billed by CEO Steve Jobs on Wednesday as “so much more intimate than a laptop and so much more capable than a smart phone.”
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Toyota U.S. sales halt deals blow to image, earnings
NEW YORK (AP) — Toyota’s suspension of U.S. sales on an unprecedented scale to fix faulty gas pedals deals a blow to the automaker’s reputation for quality and endangers its fledgling earnings recovery.
The suspect parts are made by a U.S. supplier, but they are also found in its European-made vehicles, an official with the automaker said Wednesday. Toyota said it hasn’t decided what to do there.
Japan’s Toyota Motor Corp. announced late Tuesday it would halt sales of some of its top-selling models to fix gas pedals that could stick and cause unintended acceleration. Last week, Toyota issued a recall for the same eight models affecting 2.3 million vehicles.
Toyota is also suspending production at six North American car-assembly plants beginning the week of Feb. 1. It gave no date on when production could restart.
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Halliburton asks high court to block trial
WASHINGTON (AP) — Halliburton Co. is asking the Supreme Court to block a Texas woman’s lawsuit alleging she was raped by military contractor co-workers in Iraq.
The company wants the justices to reverse a lower court ruling that Jamie Leigh Jones’ case can go to trial. Jones sued Halliburton and its former subsidiary KBR, saying she was raped while working for KBR at Camp Hope, Baghdad, in 2005.
The trial is set to begin in February 2011.
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