Friday, January 9, 2009
The first full week of 2009 brought no major shocks to Wall Street, but neither gave many investors reason to cheer.
An increase in unemployment on Friday caused a sharp drop on Wall Street, after investors expressed concern that Americans continue to tighten their belts for a while.
According to preliminary calculations, the Dow Jones industrial average fell 143.28 points, 1.64%, to close at 8599.18. During the week, the Dow lost nearly 5%.
The Labor Department report, awaited by investors, showed that employers cut 524,000 jobs in December, a number smaller than expected, which was 550,000. Yet the unemployment rate jumped to 7.2%, its highest level in 16 years, a 7% higher than expected by economists, and exceeded that seen in November from 6.8%.
The loss of jobs did not cause panic on Wall Street, but concern.
"People say to know how the economy is bad, but know what it feels like when the truth comes to your house," said Stu Schweitzer, global markets strategist at the private banking arm of JP Morgan. "There is data, but how they suffer. And it feels terrible to have so many Americans who are losing their jobs, and many more likely to continue in the coming months."
The rising unemployment tends to erode consumer spending, which accounts for more than two thirds of economic activity in the United States. For the whole 2008, the economy has lost 2.6 million jobs, the largest amount since 1945.
Retail companies have reported dismal sales figures during the holiday season, and there is concern on Wall Street on how long the economy will have on the withdrawal of consumer spending.
On Friday, President-elect Barack Obama felt the loss of jobs is "a stark reminder of how urgent it is to take measures" to revive the economy of the nation vapuleada. Obama is planning an economic stimulus package of about 800,000 million dollars, based on tax cuts and other measures to help individuals and businesses.
Indicators broader stock market also lost ground. The Standard & Poor's 500 fell 19.38 points, 2.13%, to 890.35, and the Nasdaq composite index fell 45.42 units, 2.81%, to 1571.59.
The Russell 2000, the barometer of smaller companies listed, had a decrease of 20.71 points, 4.13%, to 481.30.
Shares overcame low 2-1 to advance to the Stock Exchange in New York, where trading volume was light, by 1160 millions of titles.
During the week, the Dow fell 4.8%, the S & P fell 4.5% and the Nasdaq lost 3.7%.
Bond prices rose after investors sought refuge in the gray economic data emerged on Friday. The yield on the Treasury to license 10 years, which moves in the opposite direction to its price, fell to 2.36%, 2.44% observed in respect of the closure on Thursday.
The dollar had a mixed performance against major currencies, while gold fell.
The light oil with low sulfur lost 87 cents, to $ 40.83 on the New York Mercantile Exchange, after falling to $ 39.38 even.
In other markets, the Japanese market's Nikkei average fell 0.45%, the UK FTSE 100 fell 1.26%, the German DAX fell 1.97% and the French CAC-40 lost 0.75%.
