Major U.S. indices are range-bound in the morning session on Friday as investors digest the U.S. unemployment rate report and monitor the ongoing sovereign debt contagion from Greece. The Dow has been hovering around the psychologically important level of 10,000 this session, dipping below it at various times.
The S&P 500 Index dropped 1.35 points, or 0.13 percent, to trade at 1,061.76 at 11:15 a.m. EST, The Dow Jones Industrial Average fell 31.89 points, or 0.32 percent, to trade at 9,970.29. The tech heavy Nasdaq Composite leads with a gain of 0.07 percent to trade at 2,127.00.
Tech stocks are leading the market today. Microsoft (NASDAQ:MSFT), Apple (NASDAQ:AAPL), and Google (NASDAQ:GOOG) are up modestly.
Cisco (NASDAQ:CSCO) continues to soar on its stellar earnings, gaining 1.67 percent today. Cisco, the only component of the Dow to end higher yesterday while the broad market sold heavily, helped lift the Dow to close above 10,000.
The dollar, which soared yesterday as investors sought safety, has only gained modestly today since the opening of the European session. It gained as much as 130 pips against the euro yesterday; today it has gained only about 30 pips so far.
European financial firms also fared better. Barclays (NYSE:BCS) is down 0.41 percent and UBS (NYSE:UBS) is up .08 percent. The National Bank of Greece (NYSE:NGB), however, continues to plunge, dropping 4.19 percent.
The January unemployment rate fell to 9.7 percent. It is the first single-digit reading since last September. Futures on the S&P 500 climbed into positive territory after the release of this better than expected report.
However, the same report showed that nonfarm payrolls were nearly unchanged, falling by 20,000. Goods-producing firms shed 60,000 jobs and construction firms shed 75,000 jobs.
According to the New York Times, the smaller payrolls and rising unemployment rate may be caused by a statistical quirk. Unemployment rate is obtained by sampling random U.S. households. The payrolls number is considered a more reliable snapshot of the economy because it incorporates data from a large number of businesses, the publication said.
The U.S. unemployment claims of 480,000 released yesterday may be further evidence to quench the optimism over today's reporting of a single-digit unemployment rate.
Worries of sovereign debt contagion from Greece continued today. The credit-default swaps on the government debt of Greece, Spain, and Portugal widened to record levels. Fears may also have spread beyond the European Union.
Research from Deutsche Bank released today stated that the problems currently faced by peripheral Europe could be a dress rehearsal for what the U.S. and U.K. may face further down the road.
Greek citizens, notably government employees, are protesting against the unpopular austerity measures. This further complicates the problem in Greece and raises concerns about the capability of Greece to fix its financial problems without a bailout from the IMF or other European nations.
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