الاسهم الامريكية تهوي بسبب تقرير البطالة السئ و ارباح امازون الغير جيدة.
Jobs data, Amazon take their toll
Payrolls up 193,000; jobless rate 4.7%; wages climb
By Mark Cotton, MarketWatch
Last Update: 2/3/2006 12:08:56 PM Data provided by
NEW YORK (MarketWatch) -- U.S. stocks fell Friday after an unexpected drop in the jobless rate to 4.7% coupled with a bigger-than-expected rise in wage inflation reignited rate-hike fears, with Amazon.com Inc.'s weak earning report further undermining sentiment.
A dip in consumer sentiment and a weaker-than-expected report on the nation's services sector also weighed.
The Dow Jones Industrial Average ($INDU) was last down 37 points at 10,815, but off an early low of 10,783.97.
The Nasdaq Composite Index ($COMPQ) fell 16 points to 2,265 while the S&P 500 Index ($SPX) dropped 4 points to 1,267.
The main impetus behind the selling was the employment figures," said Al Goldman, chief market strategist at AG Edwards. "Even though we created 193,000 new jobs, which was less than consensus, the unemployment rate falling to 4.7% points out that the labor market is very tight and this has conjured up concern the Fed may not stop at 4.75% on Fed funds but maybe it will go up to 5%."
Goldman said a tight labor market worries the central bank as companies have to offer higher salaries to attract workers, which leads to wage inflation: "And the Fed is in business for one reason only, and that is to try and control inflation."
On the broader market for equities, decliners outpaced advancers by 19 to 11 on the New York Stock Exchange and by around 17 to 10 the Nasdaq.
By sector, Internet stocks ($GIN) fell sharply, hurt by Amazon's earnings. Gold stocks ($GOX), networkers (NWX), airlines ($XAL) and retailers ($RLX) were other significant decliners.
Volume was 723 million on the Big Board and 965 million on the Nasdaq.
Jobs report stokes rate-hike worries
With the Fed having left open the possibility of further rate increases earlier in the week, investors were hoping the January employment report would not give the central bank a reason to lift.
The U.S. unemployment rate fell to a 5-year low of 4.7% in January as 193,000 jobs were added to nonfarm payrolls, the Labor Department said.
The January payroll figures did fall short of expectations for a gain of 248,000, but with upward revisions to November and December of 81,000, the total payroll count was a bit more than expected.
The drop in the jobless rate to the lowest level since April 2001 was a surprise: Economists expected the unemployment rate to remain at 4.9%.
Average hourly wages rose 7 cents or 0.4% to $16.41, when economists had been expecting only a 0.3% gain. See full story.
The Fed has been raising interest rates as it attempts to slow economic growth in a bid to contain inflation. The jobs report shows the economy growing at a healthy pace, but it also shows that wage inflation is picking up.
"This report is much stronger than it first appears," said Ian Shepherdson, chief U.S. economist at High Frequency Economics. "If [the February employment report] is broadly similar, a March 28 hike is assured."
The Fed raised its short-term interest rate by a quarter percentage point to 4.5% last Tuesday. The Federal Open Market Committee, the Fed's interest-rate setting body, next meets at the end of March.
Dollar, gold, bonds
The employment report filtered through the financial markets.
The dollar gained against both the euro and the Japanese yen as the data helped build a case, among some currency traders, for the Fed to continue raising rates as a tight labor market fuels wage inflation. The euro was last down 0.6% at $1.2011. Against the yen, the greenback was up 0.5% at 110.09. See Currencies
Gold futures turned lower in late morning trading.
"Recent strength in the dollar is making some would-be buyers a little nervous, and that could rob the market of some upward momentum," Nell Sloane, analyst at NSFutures.com, said in daily commentary.
Gold for April delivery was last down $3.10 at $573.70 an ounce. See Metals Stocks
On the bond market, long-term Treasurys prices turned higher, sending yields lower as investors snapped up attractive valued instruments after fairly heavy selling pushed prices lower in the early going. The benchmark 10-year note was up 3/32 at 99 19/32, with its yield ($TNX) at 4.55%. See Bond Report
The odds rose on the Chicago Board of Trade's federal funds futures market that the Fed's short-term interest rate will be at 5% by the end of July.
Mixed data
Among other data of note, U.S. consumer sentiment unexpectedly dipped in January. See full story.
Nonmanufacturing sectors of the U.S. economy, meanwhile, expanded at a slower pace during January, the Institute for Supply Management reported. The ISM nonmanufacturing index fell more sharply than expected to 56.8% from 61.0% in December. See full story.
Orders for U.S.-made factory goods increased 1.1% in December, led by orders for durable goods and investment in capital equipment, the Commerce Department estimated. The rise in factory orders was above the 0.9% expected by economists surveyed by MarketWatch. See full story.
Oil edges higher amid Iran uncertainty
Crude-oil futures rose as the International Atomic Energy Agency reconvenes to discuss what measures need to be taken over Iran's resumption of its nuclear program.
On Thursday, futures fell to a three-week low after IAEA said the situation had not yet reached a crisis. Crude for March delivery was last up 47 cents at $65.15 in New York trading. See Futures Movers
Stocks on the move
In what has been a mixed week for quarterly earnings, Amazon.com Inc. (AMZN) saw its shares slide 11% to $37.98 after the online retailer's results came up short, hurt by higher costs and lower-than-expected sales. See full story.
Shares of Electronic Arts Inc. (ERTS) rose 1.7% to $54.48, helped by an upgrade from broker William Blair, even as the video-game maker posted quarterly results that fell shy of estimates. See full story.
Blair said the company's stock price has almost bottomed out, with investors now able to look forward to positive momentum in 2006. Piper Jaffray, however, took a different tack, downgrading the stock on valuation concern and management's caution regarding growth in 2006.
Shares of Merck (MRK) rose 1% to $34.15 on a media report that the second and third federal trials related to its Vioxx painkiller drug have been postponed for about two months.
On the deal front, ConAgra Foods Inc. (CAG) said it is planning to sell most of its refrigerated meats businesses, including the Armour, Butterball and Eckrich brands. The combined annual sales for the businesses being offered for sale are about $1.9 billion. ConAgra shares were up 35 cents at $21.09.
