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07/02/09 16:20 ET Dow -218.94 at 8285.12, Nasdaq -49.20 at 1796.52, S&P -26.18 at 897.15:
[BRIEFING.COM] A disappointing jobs report prompted sellers to knock stocks sharply lower in the first few minutes of trading. Stocks then locked into an extremely narrow trading range until the S&P 500 slipped below the psychologically significant 900 level in the final half-hour of trading.
Following an uninspiring finish to the previous session, stocks had already been showing weakness ahead of the government's latest jobs report, which was released shortly before the opening bell. However, sellers became emboldened when the June Nonfarm Payrolls report indicated that 467,000 jobs were lost last month. That marked pickup from the 322,000 jobs that were lost in May, and topped the 365,000 losses that were widely expected.
Meanwhile, the national unemployment rate now stands at 9.5%, which isn't quite as bad as the 9.6% that was expected, but it still marks a 25-year high. According to Reuters, the White House expects unemployment rate to climb to 10% in next two to three months. Average weekly hours came in at a slightly worse-than-expected 33.0. Since hours often lead payrolls and employers are cutting back hours suggests that hiring remains a long ways off, which will damper consumer spending and hopes of a consumer-led economic recovery.
May factory orders made a surprisingly strong 1.2% increase, which bested the 0.9% increase that had been forecast. The stock market attempted to pare some of its losses following the orders announcement, but the disappointing jobs report dominated headlines and overshadowed the encouraging orders data.
Since U.S. market's are closed Friday in observance of Independence Day, this session's decline gave stocks their third straight weekly loss. During that time, stocks have shed more than 5%. This session's weakness was widespread as declining issues outnumbered advancers by more than 20-to-1 in the S&P 500.
Losses were steepest among energy and financial stocks. They both finished 3.7% lower. Energy was hampered by a 3.7% drop in crude oil prices, which closed at $66.73 per barrel. Crude has fallen for three consecutive sessions. Meanwhile, financials were severely undercut by losses among insurers.
Elan (ELN 7.66, +0.66) was one of the few stocks to post a gain this session. The company garnered support following the announcement that Johnson & Johnson (JNJ 55.97, -1.10) will acquire certain drug assets from Elan and will invest $1 billion in Elan through an affiliate.
In other corporate news, Exelon (EXC 49.03, -2.53) has increased its exchange offer to acquire NRG Energy (NRG 24.59, -1.46) by 12%. The increase was widely expected and neither stock was able to attract buyers amid the session's broad-based selling effort.
Trading volume was extremely light ahead of the long, holiday weekend. Hardly 700 million shares traded hands on the NYSE in what was the most thinly traded session this year. That's even after trading had been extended by 15 minutes in order to address system irregularities.
Nasdaq -49.20 at 1796.52... S&P Midcap 400 -3.2... NYSE Adv/Dec 538/2435... Nasdaq Adv/Dec 447/2214.
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