Sun, Mar 07, 2004 - Page 10 News List

Martha, job data depress Wall Street


Disappointing job growth figures left stocks mixed after a volatile session Friday, with investors guessing whether the underlying economy was strong enough to warrant current share prices. But perhaps the biggest news of the day was Martha Stewart.

After the founder of Martha Stewart Living Omnimedia Inc was found guilty, the company's stock plunged US$3.17, or 23 percent, to close at US$10.86, the biggest percentage loser on the New York Stock Exchange for the session.

The Dow Jones Industrial Average advanced 7.55, or 0.1 percent, to 10,595.55.

Broader stock indicators were narrowly mixed. The Standard & Poor's 500 index gained 1.98, or 0.2 percent, at 1,156.86, and the NASDAQ composite index was down 7.48, or 0.4 percent, at 2,047.63.

Despite the day's volatility, the markets ended the week with small gains, continuing a lackluster trend that has stalled Wall Street's 11-month rally. For the week, the Dow gained 0.1 percent, the S&P 500 rose 1.0 percent and the NASDAQ was up 0.9 percent. It was the second straight week of gains for the S&P, while the Dow and NASDAQ reversed last week's downward trend.

The session began after the US Department of Labor reported that the economy added a scant 21,000 jobs last month, far short of the 125,000 economists expected. In addition, the January figure was revised from 112,000 to 97,000, and the unemployment rate remained stalled at 5.6 percent last month.

The immediate response was impressive -- the Dow plunged more than 60 points in the first minutes of trading.

But a second look at the overall economy prompted buying, particularly in defensive sectors such as finance and healthcare, and sent the major indexes seesawing in a broad range throughout the morning.

"I think you have investors taking heart that the jobs figures means that the Federal Reserve will leave interest rates intact for longer," said Jack Caffrey, equities strategist at JP Morgan Private Bank.

"People are more inclined to seize on that theory than on the lack of jobs in the economy," Caffrey said.

Dow component Intel Corp cut its first-quarter sales forecast late Thursday, blaming a seasonal sales slump and its transition to new products. The stock dropped US$0.70 to US$28.95. With the technology sector having led much of last year's rally, the reduced outlook from this bellwether doesn't bode well for a sustained market rally any time soon, said Bill Groenveld, head trader at vFinance Investments.

"We need another sector to take hold of this market or we'll continue to drop to the wayside," Groenveld said. "But nothing's poking its head out yet, so you get everybody moving into defensive positions. At least they're staying in the market and willing to ride it out."

Sun Microsystems Inc lost US$0.36 to US$4.80 after Standard & Poor's cut the company's bond rating to junk status.

McDonald's Corp, which reported a systemwide sales jump of 22.6 percent in February, was up US$1.04 at US$29.88.

The Food and Drug Administration approved Boston Scientific's new drug-eluting coronary stent system, but the company's shares lost US$0.62 to US$43.50.

Advancing issues outnumbered decliners by a 9-to-5 ratio on the New York Stock Exchange, where volume was moderate.

The Russell 2000 index of smaller companies rose 1.16, or 0.2 percent, to 599.54.

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