FINANCIAL MARKETS : Jobless Report Fails to Stir Stock Market
The stock market drifted to a small loss Friday in a muted response to a stronger-than-expected employment picture.
The Dow Jones index of 30 industrials slipped 2.05 to 2,629.51, closing out the week with a net gain of 32.79 points.
Declining issues outnumbered advances by about 6 to 5 in nationwide trading of New York Stock Exchange-listed stocks.
The Labor Department reported Friday morning that non-farm payroll employment increased by 233,000 in October as the unemployment rate held steady at 5.2%.
Advance estimates on Wall Street had called for a gain of not much more than 150,000.
That came as a setback to some faint hopes in the financial world that the Federal Reserve might take the employment data as a cue to relax its credit policy further.
UAL jumped 11 3/4 to 184 3/4. An investor group known as Coniston Partners said it had acquired a 9.7% interest in UAL and would seek to gain control of the board of directors.
UAL shares fell sharply last month after a labor-management group couldn’t get financing for a buyout it planned.
Compaq Computer dropped 5/8 to 88 1/2 in active trading after taking a 16 7/8-point plunge Thursday on the company’s projection of disappointing profits for the fourth quarter.
Among other leading technology issues, which posted broad losses on Thursday, Digital Equipment dropped 1 3/8 to 89 1/2, and Hewlett-Packard fell 3/4 to 43 3/4. But IBM rose 5/8 to 98 1/2.
Telerate gained 1 1/4 to 20 3/4. Dow Jones & Co., which owns about two-thirds of Telerate, reached an agreement to buy the rest for a sweetened price of $21 a share.
Halliburton inched up 1/8 to 37. The company reported third-quarter earnings of 40 cents a share, up from 24 cents in the comparable period a year ago.
Big Board volume totaled 131.50 million shares, down from Thursday’s 152.44 million.
Share prices ended stronger on the London Stock Exchange, encouraged by a turnaround on Wall Street and prospects of a cash injection into the market when bids for Jaguar and DRG are completed. The Financial Times 100-share index closed 19 points higher at 2,173.1.
In Japan, banks, government offices, financial markets and many businesses were closed because of Culture Day, a national holiday.
Credit
Bond prices fell sharply after the release of the October employment report.
Traders felt the report dimmed chances for a relaxation any time soon in the Federal Reserve’s credit policy.
The Treasury’s benchmark 30-year bond dropped 11/16 points, or $6.88 for every $1,000 face amount. Its yield, which rises when prices fall, climbed to 7.93% from 7.87% late Thursday.
The federal funds rate, the interest on overnight loans between banks, was quoted at 8.688%, down from 8.75% late Thursday.
Currency
The dollar turned in a mixed performance, finishing slightly higher in domestic foreign exchange trading after falling overseas.
The dollar rose on foreign exchange markets worldwide after the Labor Department released the employment report.
But after about an hour of frantic dollar buying, activity slowed and the dollar began backtracking slowly, finishing Europe’s trading day at levels mostly lower than had been reached late Thursday.
Tokyo markets were closed for a national holiday. In London, the dollar fell to 143.25 Japanese yen from 143.75 yen at Thursday’s close in Tokyo. Later in New York, the dollar slipped to 143.25 yen from 143.425 yen late Thursday.
The British pound rose to $1.5705 in London from $1.5660 late Thursday. In New York, the dollar gained ground as the pound fell to $1.5685 from $1.5695.
Commodities
Gold gave back some of its recent gains but analysts said the market did not appear to be significantly weakened by the dip.
On other commodity markets, oil futures prices rallied; pork belly futures rose for the fifth straight day, and grain and soybean futures were mixed.
Gold settled $1.70 to $1.90 lower on New York’s Commodity Exchange, with the contract for delivery in December at $381 an ounce. Silver finished 2.5 cents to 3 cents lower, with December at $5.26 an ounce.
Gold was trading below $365 a month ago and has strengthened substantially since the Oct. 13 stock market collapse.
Analysts have attributed gold’s climb to jittery investors seeking a safe haven for their dollars. But the stock market was quiet Friday and gold prices stalled early in the day after rising above $385.
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