Deepening investor pessimism over the economy sent stocks lower Friday, as investors registered their disappointment over the government’s latest jobs report and as oil moved past $53 per barrel. The major indexes ended the week lower.
Investors saw the latest Labor Department report as a sign that the economy continues to struggle through a period of sluggish growth. Only 96,000 new jobs were created in September, far less than the 150,000 Wall Street expected.
Even as jobs remain an issue that has sapped consumer confidence, oil reached $53, adding to concerns that the markets’ traditional fourth-quarter rally would be muted this year — if it arrives at all. A barrel of crude oil set another record, settling at $53.31, up 64 cents, on the New York Mercantile Exchange.
“The jobs figure was clearly disappointing, and energy prices are still hanging in there,” said Scott Brown, senior economist at Raymond James. “It’s not a disaster, but the jobs number just isn’t good enough. The markets are taking it fairly well, considering, but it doesn’t help.”
At Friday’s close, the Dow Jones industrial average was down 70.20 points, or 0.7 percent, at 10,055.20, while the broader Standard & Poor’s 500-stock index was down 8.51 points, or 0.8 percent, at 1,122.14. The Nasdaq composite index ended the day down 28.55 points, or 1.5 percent, at 1,919.97.
Stocks ended the week lower as climbing oil prices, sluggish retail sales for September and nervousness about the jobs report and the health of the economy prompted investors to collect the modest profits from the previous few weeks of gains.
Friday’s sell-off, sparked by the jobs report and oil reaching its latest record closing price, made matters worse and put even more pressure on companies releasing earnings next week to far surpass Wall Street’s expectations. The Dow ended the week down 1.35 percent, while the S&P 500 fell 0.83 percent and the Nasdaq lost 1.14 percent.
While the nation’s unemployment rate remained at 5.4 percent for September, the Labor Department also revised August’s job creation figure downward, from the 144,000 initially reported to 128,000 — a disturbing trend for investors hoping for more job creation to further stimulate consumer spending.
Between jobs and oil, consumer confidence has waned since the summer, which leads to less consumer spending at a time when companies costs are rising due to high energy prices. The latest reading of The Associated Press-Ipsos consumer confidence index, released Friday, dropped to 97.4 in September, down from 103.4 in August.
“Right now, we can really only hope for good third-quarter earnings,” said Jack Ablin, chief investment officer at Harris Private Bank. “This jobs report was very disappointing, and we’ll start to see $50-plus oil taking its toll on the economy.”
Investors hoping for momentum from General Electric’s earnings were disappointed. GE slipped 21 cents to $33.74 after its earnings met Wall Street estimates. The conglomerate credited higher industrial sales and Olympic coverage on its NBC television subsidiary for an 11 percent rise in earnings.
Alcoa Inc., the first Dow component to report third-quarter earnings, lost 68 cents to $33.40 after reporting profits of 34 cents a share, in line with Wall Street’s reduced expectations for the aluminum company. The company blamed the recent hurricanes and labor troubles for its minimal gains from a year ago.
Semiconductor maker Advanced Micro Devices Inc. met analysts’ forecast with earnings of 12 cents per share for the quarter, but its sales were slightly less than investors had hoped for. AMD slipped 61 cents to $13.50. Rival Intel Corp. skidded 69 cents to $20.55 ahead of its earnings report next week.
Krispy Kreme Doughnuts Corp. tumbled 56 cents to $12.51 after the company announced that the U.S. Securities and Exchange Commission has opened a formal investigation into the company’s operations.
Overseas, Japan’s Nikkei average fell 0.1 percent. In Europe, Britain’s FTSE 100 closed flat, France’s CAC-40 slid 0.5 percent for the session, and Germany’s DAX dropped 0.7 percent.