Stocks have shown a lack of direction over the course of the trading day on Friday, with the major averages having difficulty sustaining any significant moves. The choppy trading comes as traders digest some weak employment that came roughly in line with economist estimates.
Before the market open, the Labor Department said that non-farm payroll employment fell by 663,000 jobs in March following an unrevised decrease of 651,000 jobs in February. The drop in jobs came roughly in line with economists' expectations of a decrease of 658,000 levels.
With the continued decrease in jobs, the unemployment rate rose to 8.5 percent in March from 8.1 percent in the previous month, in line with expectations. The increase lifted the unemployment rate to its highest level since November of 1983.
While the report points to continued weakness in the labor market, some investors were pleased that it did not show a notable surprise to the downside. Others feel that the weakness was already priced into the markets, as employment data is seen as a lagging indicator.
Separately, the Institute for Supply Management released its report on activity in the service sector for March, showing that its index of activity in the sector unexpectedly fell to 40.8 in March from 41.6 in February, with a reading below 50 indicating a contraction in the sector.
In other news, President Obama delivered a speech in Strasbourg, France. Obama focused on rebuilding the relationship between Europe and America, noting the need for unity across the Atlantic as nations face terrorist and economic threats.
We find ourselves at a crossroads, Obama said. The same forces that have brought us closer together have also given rise to new dangers that threaten to tear our world apart.
The president said that he plans to lay out a plan in Prague over the weekend that will offer a goal of a world without nuclear weapons.
Meanwhile, speaking at Wooster College in Ohio, Federal Reserve Vice Chairman Donald Kohn pledged that the Fed would continue to adapt our policies as necessary in order to boost the economy while maintaining price stability.
We have had to remain very flexible and open to policy actions that had no precedent, Kohn said. And all of us--the Federal Reserve, the Administration, and the Congress--must continue in this posture.
Additionally, Federal Reserve Chairman Ben Bernanke is currently speaking at the Richmond Fed's Credit Markets Symposium in Charlotte, NC.
The major averages have moved to the upside in recent trading, with the Nasdaq and the S&P 500 climbing back above the unchanged line. While the Dow is currently down 8.44 at 7,969.64, the Nasdaq is up 6.11 at 1,608.74 and the S&P 500 is up 0.99 at 835.37.
The recent upward move by the tech-heavy Nasdaq is partly due to considerable strength in computer hardware. The Amex Computer Hardware Index is currently up 3.4 percent after reaching a six-month intraday high.
Among hardware stocks, Palm (PALM) is currently up 6.1 percent due in part to positive sentiment generated by the release of strong quarterly results and guidance by peer Research in Motion (RIMM). Dell (DELL) is also posting a notable gain, rising 6.8 percent.
Significant strength has also emerged in the oil service sector, as reflected by the 2.9 percent gain currently being shown by the Philadelphia Oil Service Index. The strength in the sector comes in spite of a modest decrease by the price of oil.
While some natural gas, real estate, and steel stocks have also shown strong upward moves, considerable weakness remains visible among gold stocks. With the price of gold falling $7.90 to $901 an ounce, the Amex Gold Bugs Index is down 4.4 percent.
Health insurance stocks also continue to post steep losses resulting in a 3.3 percent loss by the Morgan Stanley Healthcare Payor Index. Some biotechnology, pharmaceutical, and healthcare provider stocks are also under pressure.
Stocks In The News
Among individual stocks, Micron Technology (MU) is suffering a loss of 4.5 percent on the day, pulling back well off the five-month closing high it set in the previous session.
The loss by Micron comes after the company reported a second quarter loss of $0.97 per share, compared to a loss of $1.01 per share in last year quarter. Micron said its net sales for the quarter fell to $993 million compared to analyst estimates of $1.14 billion.
Additionally, Hutchinson Technology Inc. (HTCH) is down 39.3 percent after the company reported preliminary second quarter net sales of approximately $79 million, well below analyst estimates of $101 million.
Meanwhile, AngioDynamics Inc. (ANGO) is posting a gain of 11.1 percent even though the company reported lower third quarter earnings on an increase in expenses and lowered its full year earnings and revenue guidance.
In overseas trading, stock markets across the Asia-Pacific region closed mostly higher on Friday, adding to the strong gains posted in the previous session. Japan's benchmark Nikkei 225 Index closed up 0.3 percent, although well off its best level of the day.
Meanwhile, the major European markets are once again turning in a mixed performance. While the German DAX Index is currently up 0.1 percent, the French CAC 40 Index and the U.K.'s FTSE 100 Index are down 1.1 percent and 2.3 percent, respectively.
In the bond market, treasuries have shown a notable move to the downside over the course of the trading session. Subsequently, the yield on the benchmark 10-year note is currently up 12 basis points at 2.872 percent.
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