The Dow industrials declined on Friday, as bleak jobs data and a sharper contraction in the services sector overshadowed reassuring results from BlackBerry maker Research in Motion
Wall Street received more confirmation about deterioration in the labor market, when data showed the U.S. unemployment rate hit the highest level since 1983 as employers cut 663,000 jobs in March. The numbers, though, matched forecasts.
Another report showed the U.S. services sector shrank for the sixth straight month in March as recession-weary consumers tightened their belts.
But the Nasdaq rose, lifted by a surge in the U.S.-listed stock of Canada's Research in Motion a day after the technology bellwether posted surprisingly strong results. RIM jumped almost 22 percent to $59.84.
The broad S&P 500, however, was little changed.
The unemployment number, no matter how you spin it, was not a good thing, but Nasdaq is keeping this up today, said Joe Saluzzi, co-manager of trading at Themis Trading in Chatham, New Jersey.
If RIM news wasn't around last night, today would have been a bad day.
The Dow Jones industrial average <.DJI> dropped 35.28 points, or 0.44 percent, to 7,942.80. The Standard & Poor's 500 Index <.SPX> shed just 0.74 of a point, or 0.09 percent, to 833.64. The Nasdaq Composite Index <.IXIC> gained 6.37 points, or 0.40 percent, to 1,609.00.
At Thursday's close, the S&P 500 was up 23.3 percent from a more than 12-year low set in early March, helped by growing optimism that the economic slowdown is starting to moderate.
This rally is overextended and I don't think it will hold, Saluzzi added. I think 23 percent off lows is a bit too much at this point.
Even with the subdued tone, the market was on track for its fourth straight week of gains.
An index of pharmaceutical stocks <.DRG> fell 2.2 percent, but was still up more than 9 percent from last month's lows. The heaviest weights on the blue-chip Dow average were Johnson & Johnson
In contrast, an S&P index of financial companies' stocks <.GSPF> gained 0.5 percent.
Financial stocks cut earlier losses after Federal Reserve Chairman Ben Bernanke said the Fed will use all of its tools to stabilize markets and set the stage for an economic recovery, even though he did not provide a time frame for when a recovery will occur.
(Editing by Jan Paschal)