The New Zealand share market opened steeply lower on Friday after receiving a negative overnight lead from Wall Street, where the major U.S. averages closed lower on profit taking and concerns over the weak results at the latest government bond auction.

The benchmark NZX 50 index was down 25.86 points or 0.91% to 2,829.00 shortly after the market opened for the day, while the broader NZX All Capital Index lost 26.40 points or 0.91% to 2,879.33.

The New Zealand market closed at a 6-month high on Thursday, helped by late buying after the country's employment report showed fewer than expected job losses at companies. The benchmark NZX-50 closed at 2,854.87, up 23.5 points or 0.83%.

The New Zealand Stock Exchange reported trading volume of 69.5 million shares valued at NZ$113.2 million. Advancing issues outnumbered decliners 61 to 28 with 30 unchanged.

In overseas trading, stocks on Wall Street moved broadly lower on Thursday, with traders concerned about weak results at the latest government bond auction and the rising cost of capital.

After failing to sustain an initial upward move, the U.S. stocks moved sharply lower over the course of the trading day. The major averages all pulled back firmly into negative territory after reaching multi-month intraday highs in early trading.

The downturn was partly due to profit taking, with traders cashing in on the market's recent gains ahead of the release of the results of the government's stress tests of the nation's nineteen largest financial institutions.

Some additional selling pressure was generated by the release of the results of the Treasury Department's auction of $14 billion worth of 30-year bonds, which attracted below average demand amid record government debt sales.

The initial strength in the markets came after the Labor Department released a report showing an unexpected decrease in initial jobless claims in the week ended May 2. The department said initial jobless claims, a closely-watched gauge of layoffs, dropped to 601,000 for the week ended May 2nd. This was down 34,000 from the previous week's revised total of 635,000.

The major U.S. averages moved off their lows going into the close but remained firmly negative. The Dow closed down 102.43 points or 1.2 percent at 8,409.85, the Nasdaq closed down 42.86 points or 2.4 percent at 1,716.24 and the S&P 500 closed down 12.14 points or 1.3 percent at 907.39.

Crude oil added to its highest close since November on the New York Mercantile Exchange on Thursday, but gave back most of its gains from earlier in the day as stocks turned lower. Oil earlier climbed above $58 on hopes the recession is coming to and end and energy demand will improve.

Light sweet crude for June delivery climbed to $56.71 per barrel, up 37 cents on the session. Prices touched as high as $58.57, the highest intraday level for a front-month contract since November 17, but later touched as low as $55.46.

On the currency front, the New Zealand dollar was buying US59.10c by 8am on Friday, compared to US58.85c at 5pm on Thursday.

In the early trading on the New Zealand stock market on Friday, market leader Telecom fell 2.48% after the company reported its third quarter results. Meanwhile, second ranked Contact Energy remained unchanged, as Fletcher Building, the third best stock, slipped 1.75%.

In the retail sector, Hallenstein Glasson, jewelry retailer Michael Hill International and Pumpkin Patch remained unchanged, as Warehouse dropped 0.80%.

In the energy sector, Vector gave up 1.82%, as TrustPower remained unchanged in the early trading on Friday morning.

Among the dual listed issues, AMP dropped 1.44% and Australia and NZ Banking Corp eased 0.45%, as APN News & Media, Lion Nathan, Telstra and Westpac Bank remained unchanged.

Among other notable stocks, Infratil, Mainfreight, Methven and Sky Network Television remained unchanged, as Nuplex dropped 2.50%, Sky City lost 1.71% and Steel & Tube Holdings advanced 0.34%. Fisher & Paykel Appliances fell 2.21%, as Fisher & Paykel Healthcare dipped 0.63%.

The other major losers on Friday morning included- Auckland International Airport by 0.58%, AMP NZ Office Trust by 1.32%, Freightways by 0.63%, Guinness Peat Group by 1.32%, ING Medical Properties Trust by 0.88%, New Zealand Refining Company by 0.59%, NZ Farming Systems by 3.57%, PGG Wrightson by 1.86%, Port of Tauranga by 0.70%, Ryman Healthcare by 1.71% and Skellerup Holdings.

The major gainers in the day's early trading were- Air New Zealand by 0.95%, NZX Limited by 1.55%, Pike River Coal by 1.10%, Rakon Limited by 1.97%, Tourism Holdings by 1.96% and Tower by 1.95%.

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