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Wall St drops on caution before July jobs data

Wall St drops on caution before July jobs data
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First Published: Fri, Aug 07 2009. 08 37 AM IST
Updated: Fri, Aug 07 2009. 08 37 AM IST
New York: US stocks fell on Thursday as investors turned cautious a day ahead of a crucial government report on July employment, and took profits after recent strong gains.
The stock market’s second day of declines came on the heels of a four-day rally that pushed US indexes on Tuesday to close at their highest levels since last fall.
“Obviously, everyone looks at the employment number as potentially market moving, so there could be a little trepidation ahead of that report,” said Todd Salamone, vice president of research at Schaeffer’s Investment Research in Cincinnati, Ohio.
Losses were broad-based, with the consumer staples and telecommunications services sectors among the drags on the S&P 500. An S&P index of consumer staples stocks fell 0.9%, while an S&P index of telecom services shares lost 1.2%.
Procter & Gamble Co shares fell for a second day after posting an 11% drop in quarterly sales on Wednesday. In Thursday’s session, P&G’s stock lost 4.5% to close at $51.46. It was the top drag on the Dow.
Another Dow component, Cisco Systems Inc, the world’s largest network equipment manufacturer, also weighed on sentiment as its chief executive John Chambers said that it’s too soon to call a recovery.
After losing ground in morning trading, Cisco rose 0.6% to close at $22.308 on the Nasdaq.
Wall Street’s attention is now on the government’s all-important non-farm payrolls report, which will show the number of jobs lost in July. The data will be released before the bell on Friday.
A Reuters survey forecasts that the Labor Department report will show 320,000 workers lost their jobs in July, the least for any month since September last year.
The Dow Jones industrial average declined 24.71 points, or 0.27%, to 9,256.26. The Standard & Poor’s 500 Index fell 5.64 points, or 0.56%, to 997.08. The Nasdaq Composite Index slid 19.89 points, or 1%, to 1,973.16.
After the closing bell, shares of graphics chipmaker Nvidia Corp rose 3.7% to $13.60 after it reported quarterly results. Nvidia’s stock closed on Nasdaq at $13.12, down 2.1%.
In the regular session, shares of low-cost wireless carrier MetroPCS plunged almost 30 percent to close at $8.99 after posting disappointing quarterly results.
Despite the latest pullback, the broad S&P 500 is up 47.4% from its 12-year closing low in early March. The rally has been driven by a string of economic data suggesting a recovery, and an earnings season with most S&P 500 companies beating expectations.
Before the opening bell, numbers from the Labour Department showed initial jobless claims fell 38,000 to a seasonally adjusted 550,000 for the week ended Aug. 1, down substantially from the 588,000 the previous week. The latest weekly claims were well below the forecast calling for 580,000.
Positive data also came from July retail sales, as some US retailers reported sales declines that were not as steep as expected. Investors are looking for signs of life among recession-weary consumers to help underpin a potential economic recovery.
Volume was below average on the New York Stock Exchange, with 1.38 billion shares changing hands, under last year’s estimated daily average of 1.49 billion, while on the Nasdaq, about 2.45 billion shares traded, above last year’s daily average of 2.28 billion.
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First Published: Fri, Aug 07 2009. 08 37 AM IST
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