"It's been a mixed bag day," says Stephen Carl, head of U.S. equity trading at the Williams Capital Group. Cyclicals and financials are up, but biotechs, energy stocks and wireless companies are lower, he notes. "There's no conviction either way about whether the Fed will move 50 or 25 basis points next week." Still, hopes that the Federal Reserve will trim the Fed funds target rate to 2.0% at its Nov. 6 meeting is keeping losses to a minimum.
Worse-than-expected economic data provided more evidence that the U.S. economy is in recession and held down the major indexes. The jobless rate rose to 5.4% in October, compared with 4.9% in September -- the sharpest monthly increase since May 1980 and the highest level in the last five years. Non-farm jobs fell 415,000 in October, with the manufacturing sector losing 142,000 and service down by 111,000. Average hourly earnings rose 0.1%.
Investors seem to be looking past the week's onslaught of bleak economic data, including a preliminary read on third-quarter GDP that indicated a contraction. The markets also withstood ugly manufacturing updates and the grim jobs report, suggesting that investors are expecting better economic conditions and improved profits.
The Dow Jones industrial average rose 46.15 points, or 0.50%, to 9,310.05. The tech-heavy Nasdaq composite index shed 2.31 points, or 0.13%, to 1,743.99. The broader S&P 500 index gained 1.48 points, or 0.14%, to 1,085.58.
In corporate news, software giant Microsoft Corp. (MSFT
) will settle its historic antitrust case with the government, though some states want more time to review the deal. The U.S. Justice Department said its settlement will impose a "broad range of restrictions" on the technology bellwether. News of the settlement led a broad stock rally Thursday.
Among other stocks in the news, Standard & Poor's cut Enron's (ENE
) debt ratings and placed the company on Credit Watch with negative implications.
Shares of Cigna Corp. (CI
) rose as the insurance giant posted higher third-quarter income.
Drug companies Cima Labs (CIMA
) and Noven Pharmaceutical (NOVN
) are trading sharply lower following analyst downgrades.
Profit taking has weighed heavily on the 30-year Treasury bond, knocking it down by over two points, while the two-year bond posted gains.
In other economic data, the Commerce Dept. released a report that said factory orders fell 5.8% in September, worse than the 5.0% drop expected by economists.
European markets ended mixed follwoing an ugly U.S. jobs update. In London, the FTSE 100 index gained 58.30 points, or 1.15%, to 5,129.50, even though the U.K.'s CIPS construction index fell to 52.5 in October, from 54.2 in September. The Paris CAC 40 index finished up 2.46 points, or 0.06%, to 4,350.68, following data that French PMI to 42.0 in October, from 45.5 in September. In Germany, the DAX index lost 52.82 points, or 1.14%, to 4,583.31, amid profit taking as German PMI fell to 42.0 in October from 45.1 in September.
In Asia, markets finished higher. Japan's Nikkei added 36.50 points or 0.35%, to 10,383.78. In Hong Kong, the Hang Seng index jumped 27.21 points, or 0.27%, to 10,186.06.
Congress should meet President Bush's demand for an economic stimulus package by Nov. 30, Senate Majority Leader Tom Daschle says. Bush said newly released jobless figures underscore the need for haste: wires.
Traffic flowed across San Francisco Bay Area bridges during the morning commute, despite threats of a terrorist attack, but traffic was lighter than usual. The FBI has alerted law enforcement agencies in eight Western states that it has unconfirmed information terrorists may be targeting suspension bridges on the West Coast: wires.
The anthrax that killed a New York woman is virtually identical to bacteria found elsewhere in the bioterrorism scare, said investigators who remain at a loss to explain how she was infected: wires.