FINANCIAL MARKETS : Stocks Slide on Jobless Report; Gold Eases : Market Overview
Highlights of Friday’s market activity, compiled from Times staff and wire reports:
* The June employment report gave fresh evidence of a slow economy, sending blue-chip stocks lower. But smaller stocks inched up.
* Interest rates fell across the board as the employment report put to rest lingering fears of a Federal Reserve Board tightening.
* Gold prices eased following Thursday’s big rally.
Stocks
The June employment report showed only a tiny gain in jobs for the month, raising new worries that the economy is slowing badly.
Traders seized on the news to take profits in industrial issues that had led the market recently.
Still, the selling was restrained, analysts said. The Dow industrials shed 26.57 points to 3,483.97. For the week, the Dow lost 6.92 points.
While losers topped winners by 11 to 8 on the New York Stock Exchange, the NASDAQ market of mostly smaller stocks showed strength: Winners edged losers there, and the composite index added 0.90 point to 704.49.
Trading volume was muted by the approach of the long holiday weekend. NYSE volume was just 220.75 million shares.
Among the market highlights:
* Energy stocks tumbled as oil prices plunged. Mobil fell 1 3/4 to 72 5/8, Chevron lost 1 1/8 to 85 5/8, Atlantic Richfield dropped 2 to 113 5/8, Unocal slid 3/4 to 28 3/4 and Louisiana Land gave up 1 1/8 to 42 1/2.
* Industrial stocks weakened by the jobs report included Ford, off 1 1/4 to 49 3/4; Goodyear, down 1 1/4 to 40 3/8; Kennametal, down 1 1/4 to 32, and Caterpillar, off 7/8 to 73 1/8.
* IBM tumbled 1 to 48 1/4 on rumors that it will take massive write-offs to cover new job cuts.
* Investors continued to bail out of sinking drug stocks. Merck lost 1/2 to 34 1/2, Pfizer fell 1 1/2 to 63 1/2, Schering-Plough gave up 1 1/8 to 67 3/8 and Amgen lost 1/2 to 35 3/8.
* Retailer TJX plunged 2 5/8 to 30 1/4 on an analyst’s downgrade. Retail issues in general were weak.
* On the plus side, some tech issues advanced. Hewlett-Packard added 3/4 to 80 1/2, Sun Microsystems rose 1 to 30 5/8, Novell gained 5/8 to 26, PowerSoft added 1/2 to 30 7/8 and Odetics was up 3/8 to 10.
Overseas, Tokyo’s Nikkei index slumped 303.15 points to 19,621.46. In London, the FTSE-100 index sank 31.1 points to 2,857.7, hurt late in the day by Wall Street’s slide. In Frankfurt, the DAX average lost 8.82 points to 1,697.81.
Other Markets
Bond yields fell as the June jobs report crushed any worries about tighter Federal Reserve policy.
The 30-year Treasury bond yield slid to 6.66% from 6.68% on Thursday.
Perhaps more important, short-term rates declined broadly. The discount rate on one-year T-bills dropped to 3.20% from 3.28%.
Short rates had held up in recent weeks on concerns that the Fed might have to raise short rates to fight inflation fears. But the newly weakened economy appears to make a Fed move all but impossible.
Still, some bond traders said the market remained jittery about inflation. The Commodity Research Bureau index of key commodities surged for a second day, up 2.28 points to 212.01.
Near-term gold futures eased $1.50 to $385.90 an ounce on the New York Comex after Thursday’s $9 jump. But silver gained 9 cents to $4.86, and soybean and wheat prices also shot up.
The dollar ended at 108.55 Japanese yen and 1.697 German marks in New York, up from Thursday’s 107.38 yen and 1.693 marks.
Market Roundup, D4
