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Stocks finished sharply lower Friday, as market players weighed the government's March employment report and a rise in the 10-year Treasury yield to its highest close since 2002 stoked inflation fears. Profit-taking added to stock price weakness, says Standard & Poor's MarketScope.
The Dow Jones industrial average fell 96.46 points, or 0.86%, to 11,120.04, with Hewlett-Packard (HPQ) leading the retreat. The broader Standard & Poor's 500 index was down 13.54 points, or 1.03%, to 1,295.5. The tech-heavy Nasdaq composite slid 22.15 points, or 0.94%, to 2,339.02.
Investors were assessing a key labor market gauge Friday. The Labor Department said nonfarm payrolls rose 211,000 in March after a downwardly revised 225,000 increase in February. The unemployment rate slipped to 4.7% from 4.8%. The data are fairly close to expectations and suggest a solid jobs market, says Action Economics.
The report comes amid concerns over Treasury yields, oil prices and the Fed, some analysts note. "This is kind of a mixed bag," says Chris Johnson, managing quantitative analyst at Shaeffer's Investment Research. "The selling is probably investors just taking profits before the weekend right now, and likely to be contained."
The underlying numbers, while strong, weren't as strong as some feared. "Overall, it's a benign report," says Brian Gendreau, investment strategist at ING Investment Management. "It looks pretty good for the economy, and it looks pretty good for the outlook for markets."
First-quarter earnings season will likely dominate investors' attention next week, with aluminum giant Alcoa (AA) and drugmaker Genentech (DNA) among companies set to report.
BlackBerry maker Research in Motion (RIMM) was lower Friday after posting a fourth-quarter profit of $18.4 million, up from a net loss of $2.6 million a year earlier.
On an up note, coffee leviathan Starbucks (SBUX) was higher after reporting 10% higher March same-store sales.
Automakers were also in the news. General Motors (GM) was modestly lower despite reports its Russian sales are strong. Ford (F) was also down after rising on news its president and chief operating officer, Jim Padilla, will retire Jul. 1 after 40 years with the company.
Drugmaker Merck (MRK) was lower as a Florida lawsuit charged the company with failing to disclose that its Fosamax osteoporosis drug can cause jawbone tissue to die.
On the brokerage front, network developer Extreme Networks (EXTR) was lower after Citigroup slashed its rating on the stock from buy to hold. Bed Bath & Beyond (BBBY) slipped as JPMorgan Chase cut its rating on the retailer from overweight to underweight.
Elsewhere, mattress maker Sealy (ZZ) was sharply higher in its first day of trading.
In the energy markets Friday, May West Texas Intermediate crude oil futures closed down 55 cents at $67.39 a barrel.
European markets finished lower. In London, the Financial Times-Stock Exchange 100 index fell 19.6 points, or 0.32%, to 6,026.1. Germany's DAX index tumbled 78.47 points, or 1.3%, to 5,952.92. In Paris, the CAC 40 index was down 47.4 points, or 0.91%, to 5,174.96.
Asian markets finished higher. Japan's Nikkei 225 index rose 74.04 points, or 0.42%, to 17,563.37. In Hong Kong, the Hang Seng index added 60.65 points, or 0.37%, to 16,471.78. Korea's Kospi index gained 5.36 points, or 0.38%, to 1,402.36.
Treasury Market
Long-term Treasury yields pushed to new multi-year highs after briefly easing on the employment numbers. Prices for 10-year Treasury notes were lower at 96-14/32 with a yield of 4.96%, while 30-year bonds fell to 91-23/32 for a yield of 5.04%.
Hogan is a reporter for BusinessWeek Online in New York
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