By Kristina Peterson
An unexpected improvement in the U.S. unemployment rate helped
soften the U.S. stock market's declines on Friday, though
investors' fears about mounting fiscal instability in Europe
persisted.
The Dow Jones Industrial Average (DJI) was recently down 53
points, or 0.5%, at 9,948.
General Electric (GE) was the measure's worst performer, down
2.2%.
Kraft Foods (KFT) was also weak, with the company down 1.6%
after announcing that its offer for Cadbury PLC (CBY) is now
unconditional after getting the approval from shareholders holding
75% of the U.K. chocolate maker's stock.
The Dow's tech components helped keep losses in check, with
Intel (INTC) up 1.4%, and Cisco Systems Inc. (CSCO) up 1.5%,
extending its gains after posting strong earnings earlier this
week.
The Standard & Poor's 500 index (SPX) was down 0.2%, with
industrials and energy sectors leading the declines. Financials,
tech and materials helped boost the measure. Leading the materials
companies, Airgas Inc. (ARG) soared 39% after Air Products &
Chemicals (APD) offered $5.1 billion, or $60 a share, for its
rival.
The Nasdaq Composite (RIXF) was down 0.1%.
The Dow traded below 10,000 all morning, after falling beneath
that level for the first time since November, just before
Thursday's close.
The 10,000 level has proven to be one of the most difficult
round-number levels for the Dow to maintain in its long history.
The blue-chip measure first pierced 10,000 in 1999 and has run to
records significantly above it several times.
January jobs
Coming off the previous session's 268-point slide, the Dow's
gains stabilized lower on Friday, after the U.S. unemployment rate
unexpectedly fell to 9.7% last month from an unrevised 10% in
December, according to the Labor Department. Economists had
forecast the jobless rate would edge higher to 10.1%.
"It's provided some relief," said Kenneth Polcari, managing
director of ICAP Equities. "I think people were a little bit
nervous in front of what they thought that number would be."
Anxiety over the instability surrounding European sovereign debt
has softened compared to how traders reacted to world markets on
Thursday, Polcari said.
"It's very calm here right now," Polcari said from the floor of
the New York Stock Exchange. "Yesterday was a little less
calm."
Still, the jobs data did not point unequivocally to a
strengthening labor market.
Nonfarm payrolls fell by 20,000 compared with a revised 150,000
drop decline in December, with the December figure revised sharply
downwards from an originally reported 85,000 drop. The Labor
Department's annual benchmark revision to the survey showed that
last year job losses were almost 600,000 more than previously
reported.
The unemployment rate may have improved because more people gave
up their job searches, said Phil Orlando, chief equity maket
strategist at Federated Investors. The number of discouraged
workers grew to 1.1 million in January, up from 929,000 in
December, according to the Labor Department. That makes the
unemployment rate likely to pick back up later in the year, he
said.
In other markets, the dollar strengthened against both the euro
and the yen. Crude oil futures slid below $73 per barrel, while
gold futures also slipped. Treasurys edged up, with the 10-year
note up 5/32 to yield 3.592%.
Among stocks in focus, health provider Aetna (AET) rose 1.3%,
after its fourth-quarter earnings fell 15%, despite prior-year
investment losses as the health insurer recorded higher claims and
pension costs. Still, analysts said the company's reserves and
balance sheet boded well for its stock going forward.
Toyota Motor Corp. (TM) rose 2.5%, after the company's president
offered "his heartfelt apology" over braking systems problems, his
first press conference since the company was hit by a wave of
recalls.