Stock market flat despite positive jobs news
FILE - In this Oct. 9, 2012, file photo, trader Andrew O'Connor works on the floor of the New York Stock Exchange. After three straight days of losses for major stock indexes, investors appeared to be looking for bargains Thursday. (AP Photo/Richard Drew, File) Purchase photo reprints »
NEW YORK — The market closed roughly flat Thursday, underwhelmed by encouraging jobs news but unrattled by worrisome developments in the global economy.
In the morning, a government report of fewer jobless claims carried the market higher. The Dow Jones industrial average rose as much as 83 points, shrugging off a widening U.S. trade deficit, higher unemployment in Greece and a ratings cut for Spain.
By late afternoon, the rally sputtered, and the Dow wavered between small gains and losses. It closed slightly down, along with the Nasdaq composite index, while the Standard & Poor’s 500 eked out the tiniest gain.
Traders, it seemed, were so used to bad news that Thursday’s developments didn’t really push them one way or the other.
“There’s not a lot to move the market today,” said Erik Davidson, deputy chief investment officer of Wells Fargo Private Bank in San Francisco. “Everyone’s talking about baseball.”
Joe Costigan, director of equity research at Bryn Mawr Trust Company in Pennsylvania, described Thursday as “a reasonable day.”
“What we’re seeing is more of a wave,” he said, “not a tide.”
The Dow finished down 18.58 points to 13,326.39. The S&P 500 inched up 0.28 point to 1,432.84. The Nasdaq fell 2.37 points to 3,049.41.
The Labor Department said that weekly applications for unemployment aid fell to their lowest level since February 2008, before the financial crisis, and when the unemployment rate was much lower — 4.9 percent, compared with today’s 7.8 percent.
Citi analysts upgraded U.S. stocks to the equivalent of buy. The analysts, led by Hasan Tevfik and Robert Buckland, argued that stocks are relatively cheap and that central banks seem likely to take more steps to try to boost the economy.
Still, their report wasn’t all cheery, and neither were most of the other economic developments Thursday. “Profits are slowing around the world,” the Citi analysts wrote, “and (earnings-per-share) expectations need to be cut further, in our view.”
Already this week, the aluminum manufacturer Alcoa kicked off the third-quarter earnings season with a disappointing loss. Thursday, shares of grocery store Safeway slipped more than 3 percent, losing 58 cents to $15.71, after it reported a lower profit margin.
The Commerce Department reported that foreign demand declined for American-made cars and farm goods. In Germany, economic researchers predicted the country’s growth would slow, and warned that patience for bailing out weaker European countries was evaporating. Unemployment in Greece, one of the countries surviving on bailouts, hit a record high of just more than 25 percent. And the Standard & Poor’s ratings agency late Wednesday cut its rating on Spain’s debt to one level above junk status.
In Tokyo, where the International Monetary Fund and the World Bank were meeting, IMF chief Christine Lagarde warned that the global economic recovery is weaker than many had expected. She called for urgent action to fix Europe’s debt problems and an approaching fiscal crisis in the U.S.
A few stocks jumped after reports of potential new owners. Sprint Nextel soared more than 14 percent, rising 72 cents to $5.76, after a report that the company could be bought by Softbank, a Japanese cell phone provider. Truck company Oshkosh Corp. jumped more than 7 percent, up $2.05 to $28.90, after activist investor Carl Icahn offered to buy the company.
The yield on the benchmark 10-year U.S. Treasury note fell by 0.01 percentage point, to 1.67 percent.