Non-Farm Payrolls Report Pushes Stocks Into The Red

Friday morning’s report from the Bureau of Labor Statistics on March non-farm payrolls turned out to be a huge disappointment. Although economists were expecting to see that 193,000 payroll jobs were added during March, the report indicated that less than half that amount – only 88,000 jobs – had been added.

Fortunately, the Commerce Department brought some good news, with its report that the trade deficit narrowed to $43 billion in February, despite expectations for expansion to $44.8 billion from January’s $44.4 billion.

After an early morning swoon, the major stock indices spent Friday struggling to regain lost ground. The Dow Jones Industrial Average (DIA) fell 41 points, closing at 14,565 for a loss of 0.28 percent.

The S&P 500 (SPY) declined 0.43 percent to close at 1553.27.

The Nasdaq 100 (QQQ) fell 0.65 percent to 3203 while the Russell 2000 (IWM) managed to recover enough to post a mere 0.30 percent decline to 922.

In other major markets, oil (USO) escaped with minimal damage, falling only 0.30 percent to close at $33.29.

On London’s ICE Futures Europe Exchange, May futures for Brent crude oil declined by $1.73 (1.63 percent) to $104.42/bbl. (BNO, USO).

April Gold Futures advanced by $26.20 (1.69 percent) to $1,578.00 per ounce (GLD).

Transports successfully drove back to positive territory with the Dow Jones Transportation Index (IYT) advancing 0.45 percent.

European stock markets had another horrible day, while Japan’s Nikkei 225 Stock Average jumped 1.58 percent. The Shanghai Stock Exchange was closed on Friday due to the Ching Ming Festival holiday (FXI). Hong Kong’s Hang Seng Index took a 2.73 percent nosedive to 21,736 on fears that the bird flu could become a major disaster (EWH).

Technical indicators point to an overbought market with declining momentum near significant long term resistance lines. The S&P 500 MACD remains below the signal line, suggesting a further decline. Its Relative Strength Index has fallen to 52.71.

For the day, major sectors finished mostly in negative territory although the energy and utilities sectors showed some strength.

Consumer Discretionary (XLY): -0.49%

Technology: (XLK): -0.77%

Industrials (XLI): -0.19%

Materials: (XLB): -0.47%

Energy (XLE): +0.22%

Financials: (XLF): -0.28%

Utilities (XLU): +0.43%

Health Care: (XLV): -0.56%

Consumer Staples (XLP): -0.68%

Bottom line: The March non-farm payrolls report took its toll on the major stock indices at Friday’s opening bell. Fortunately, stocks were able to minimize their losses by the end of the session, finishing only moderately in the red.

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