Dow slips before jobs data
Stocks declined for a second straight session Thursday as Wall Street grew nervous ahead of the government’s release today of the November jobs report and its implications for the health of the overall economy.
The skittishness came despite upbeat news from the Labor Department, which said, as expected, that the number of newly laid-off workers seeking unemployment benefits fell last week by the largest number in six months. A spike in jobless claims in the previous week stirred concern among investors that perhaps the economy was losing steam too quickly. Fluctuations tend to be wider around the holidays and today’s Labor Department report should provide some clarity about the labor market.
Wall Street hopes the job market will hold up well enough to safeguard consumer spending, though investors also are concerned that high employment levels will make it more expensive for businesses to hire and retain workers. The Federal Reserve has said it remains vigilant about inflation, and a rise in wages could make it harder for the central bank to justify a cut in short-term interest rates.
The Dow Jones industrial average fell 30.84 points, or 0.3%, to 12,278.41.
Broader stock indicators also fell. The Standard & Poor’s 500 index remained near a six-year high but was down 5.61 points, or 0.4%, to 1,407.29, and the Nasdaq composite index fell 18.17 points, or 0.7%, to 2,427.69.
The Russell 2,000 index of smaller companies was down 3.65 points, or 0.5%, at 792.29.
Weakness in energy, consumer discretionary and technology stocks added to overall selling pressure.
Bond yields were little changed, with the benchmark 10-year Treasury note easing to 4.48%, from 4.49% on Wednesday.
The euro fell slightly against the dollar after the European Central Bank raised its key interest rate a quarter of a point to 3.5%. The euro traded at $1.328, from $1.329 on Wednesday.
Crude oil futures rose 30 cents to $62.49 a barrel on the New York Mercantile Exchange.
Analysts are expecting today’s unemployment figure for November to total about 105,000.
Wall Street was pleased when the Labor Department report met expectations.
The agency said jobless claims filed last week fell to 324,000, down 34,000 from the previous week. The decline had been expected by economists who regarded the previous week’s jump as an anomaly.
In other market highlights:
* Gap rose 65 cents, or 3.4%, to $19.58 on speculation that Chief Executive Paul Pressler may step down, according to David Katz, who helps oversee $1.6 billion including 2.4 million Gap shares as chief investment officer of Matrix Asset Management in New York. Gap spokesman Greg Rossiter didn’t return a call seeking comment.
* Apple Computer slumped $2.79, or 3.1%, to $87.04. CIBC World Markets analysts wrote in a note that the company’s iPhone, a device combining its iPod music player with a mobile phone, may be delayed to as late as the second quarter of 2007.
* Home Depot was the weakest of the 30 stocks that make up the Dow, falling 99 cents, or 2.5%, to $38.93. After the bell Wednesday, Home Depot reported $200 million in unrecorded stock option expenses over a 26-year period.
* Pharmaceutical company Eli Lilly fell 87 cents to $53.99 after it said its pending acquisition of Icos would shave 10 cents a share off its 2007 profit, though it predicted the deal would add to sales starting in 2008.
* Auxilium Pharmaceuticals, a specialty drug maker, temporarily halted a late-stage clinical trial to investigate a manufacturing issue. The trial is for an injectable enzyme to treat Dupuytren’s contracture, an abnormal thickening of tough tissue in the palm and fingers. The stock fell $1.49 to $14.47.
* Advance Auto Parts rose $1.09, or 3%, to $37.01 after a Citigroup analyst raised his rating on the auto parts retailer to “buy” from “hold” in part because of the possibility for reinvigorated profit growth.