Wall Street Dips
This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.
NEW YORK (AP) – Wall Street turned lower Friday after the government reported signs of strength in employment but also a jump in wholesale inventories that indicated falling demand. Bonds fell sharply after the jobs report reduced expectations for an interest rate cut.
The mixed view of the economy sent stocks higher in early trading, but later forced them to give up a big chunk of that climb. The market, always on alert about the economy, has been even more hypervigilant and quick to react since last week’s global stock plunge.
Stocks fell further after Susan Bies, an outgoing member of the Federal Reserve’s rate-setting committee, said the economy is strong and job creation is “incredible,” but that the troubles with the subprime lending market could escalate. Concerns about mortgage problems contributed to last week’s drop.
The unemployment rate fell to 4.5 percent from 4.6 percent as U.S. employers added 97,000 nonfarm workers in February, the Labor Department said. The employment gain followed a rise in January that was larger than previously estimated. However, the Commerce Department’s report of a 0.7 percent increase in wholesale inventories in January pointed to a drop in demand and possible economic weakness.
Still, strength in the job market did help calm investors still rattled after last week’s sell-off triggered the biggest weekly loss for U.S. stocks in four years. The much-anticipated report coming in better than expected alleviated fears about the economy slowing too abruptly, but also gave investors little reason to drive markets higher.
“That was a critical number that the market looked at,” said Jim Herrick, director of equity trading at Barid & Co. “We anticipated it all week, and it assuaged some fears in the market about the economy. I think we’re still going to be data-driven for quite a while.”
In midafternoon trading, the Dow Jones industrial average fell 10.49, or 0.09 percent, to 12,250.21.
Broader stock indicators also fell. The Standard & Poor’s 500 index was up 2.02, or 0.14 percent, at 1,399.87, while the technology-dominated Nasdaq composite index rose 8.22, or 0.34 percent, to 2,379.51.
