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The Honolulu Advertiser

Posted on: Friday, June 4, 2004

Anxiety over jobs report overshadows OPEC news

By Meg Richards
Associated Press

NEW YORK — Stocks slid yesterday as investors focused on the government's upcoming employment report, shrugging off a widely expected decision by OPEC to raise output.

Concern over Intel Corp.'s mid-quarter forecast put particular pressure on tech shares, although the report issued after the session was more upbeat than some market participants expected.

The promise of more oil and a bullish reading of worker productivity failed to spark a rally as many investors took a cautious tack ahead of the Labor Department report due today.

"Basically, we're just treading water before tomorrow's employment data," said Todd Clark, head of listed equity trading at Wells Fargo Securities.

"There's a concern that a creeping rise in energy prices could slow the economy down more, so this is the next data point the market is looking at for guidance," Clark said.

Wall Street remained anxious about the effect higher oil prices are having on the economy despite the decision by the Organization of Petroleum Exporting Countries to raise its production ceiling by 2 million barrels a day.

After the close, Intel raised its revenue forecast for the second quarter, citing continued strong demand for computer chips. Intel dropped 60 cents to $27.41 during regular trading on speculation that it might lower its estimate. It recovered 54 cents in the extended session.

The jobs report due today had broader implications.

If the number of new jobs generated during May is dramatically higher than the 225,000 the market expects, investors fear it could prompt the Federal Reserve to raise interest rates sooner, and more sharply than it might otherwise.

If the number comes in much lower, it could delay a rate hike but be viewed as a sign the economic recovery is stalling.

Declining issues outnumbered advancers by nearly 3 to 1 on the New York Stock Exchange. Consolidated volume came to 1.55 billion shares, equal to Wednesday's trading.