Posted at 11:41 a.m., Friday, September 6, 2002
Improved jobs figures spur Dow rebound
By Brad Foss
The Dow Jones industrials climbed more than 140 points, erasing a sharp decline yesterday attributed to bad economic news, including sluggish productivity growth and disappointing retail sales.
"The situation overall, while not terrific, is better than some had feared," said Brian Bush, director of equity research at Stephens Inc.
Today's gains capped a tumultuous week on Wall Street, with the Dow alternating triple-digit winning sessions with triple-digit losing sessions.
Despite the rally, the major indexes ended the week lower. For the week, the Dow fell 2.8 percent, the Nasdaq composite index lost 1.5 percent and the Standard & Poor's 500 index declined 2.4 percent.
"Investors just can't seem to make up their minds," said Brian G. Belski, fundamental market strategist at US Bancorp Piper Jaffray. "Volatility continues to remain supreme."
The Dow rose 143.50 points, or 1.7 percent, to 8,427.20, according to preliminary calculations. It dropped 141 points yesterday.
The broader market also moved higher. The Nasdaq rose 44.29 points, or 3.5 percent, to 1,295.29. The S&P 500 gained 14.77 points, or 1.7 percent, to 893.92.
Driving today's increases was a government report showing that the country's unemployment rate fell to 5.7 percent in August and companies added 39,000 new jobs, the fourth consecutive monthly increase. Analysts had expected the rate to stay at 5.9 percent or edge up slightly for August.
Stock prices rallied during the first three weeks of August, but have largely fallen back since then.
With consumer confidence still fragile and businesses cautious about capital spending, analysts said the market remains susceptible to further volatility and declines. It will take a string of positive news, analysts said, for stock prices to move steadily higher.
For the time being, "it's going to be a very bumpy ride," said Brian Bruce, director of global investments at PanAgora Asset Management.
Low interest rates have helped sustain the housing and automobile markets, but retailers and airlines continue to suffer.
With so much conflicting data, Bruce said investors are likely to take their cues on any given day from the latest economic indicator or headline-grabbing news.
Shares of Intel rose $1.11, or 7.4 percent, to $16.22 after the chip maker lowered its third-quarter sales estimates late yesterday, but not by as much as Wall Street had feared. Shares of Advanced Micro Devices, a rival, rose 5 cents to $8.04.
Vivendi Universal got a boost after the Wall Street Journal, citing unnamed sources, reported that the company was in talks to sell its publishing unit for between $3 billion and $5 billion. Vivendi shares were up $1.63, or 14.4 percent, to $12.99.
However, R.J. Reynolds Tobacco fell sharply after the company lowered its earnings forecast for the third quarter. Its shares declined $4.72, or 7.9 percent, to $52.58.
Advancing issues outnumbered decliners by about 7 to 3 on the New York Stock Exchange, where volume was light.
The Russell 2000 index, the barometer of smaller company stocks, gained 10.51 points, or 2.8 percent, to 391.57.
Overseas, Japan's Nikkei stock average finished today down 1 percent. In Europe, Germany's DAX index was up 3.9 percent, France's CAC-40 rose 3.4 percent and Britain's FTSE 100 gained 2.4 percent.