Stocks slump after February jobs news
By CNBC.com
Stocks slumped despite news of strong gains in February job a day after the blue-chip index soared on solid economic news and falling oil prices.
The Dow Jones Industrial Average fell less than 10 points a day after the market rose more than 1.5 percent in the wake of a robust report on jobless claims.
Among Dow components, Boeing , DuPont,]and Hewlett-Packard led decliners, while Intel and Merck gained.
The S&P 500 and the Nasdaq also fell. The CBOE Volatility Index, widely considered the best gauge of fear in the market, fell below 19.
The Labor Department reported nonfarm payrolls added 192,000 jobs in February, while the private sector added 222,000, largely in line with expectations. The unemployment rate fell to 8.9 percent, the lowest since April 2009.
The number of jobs added in January rose to 63,000 from the 36,000 first reported.
Economists surveyed by Reuters expected payrolls to rise by 185,000 with some investors expecting a reading above 200,000. The unemployment rate was expected to have risen to 9.1 percent from 9 percent the month before.
"Our inclination heading into today’s report was to believe that much of yesterday’s equity rally was 'jobs induced' rather than oil related," Dan Greenhaus, chief economist strategist at Miller Tabak & Co. said in a note to clients Friday. "As such, our gut feeling was that a number closer to 250K would have been necessary to sustain the rally, at least initially."
But Greenhaus added, "we must note that this is, relatively speaking, a pretty decent jobs report."
Anthony Crescenzi, executive vice president at PIMCO, agreed.
"The reaction in financial markets to the stronger-than-expected jobs report obviously indicates the 'whispers' for the jobs report were for a robust report," Crescenzi said in a note to clients. "There is a reasonable question now over the extent to which good economic news is priced into markets. Nevertheless, the message from the data is that the U.S. economy is achieving escape velocity, which, because the flight is in its early stages, means there is much more favorable economic data to price in, perhaps as much as several years because the economic expansion is just 20 months old and expansions since WWII tended to last at least 60 months. It would therefore be extremely premature to think markets have thoroughly built in the economic path ahead."
The market also may be skittish as the price of oil is rising again amid continuing tensions in Libya, which also may be pressuring stocks.
London Brent crude futures rose to more than $115 a barrel as fighting in Libya intensified and on protests in Saudi Arabia's oil-producing Eastern Province, while U.S. light, sweet crude was back over $102.
