A muted response to the Labor Department’s news that employers added 290,000 jobs last month wasn’t surprising after Thursday’s turbulence. While that was the most jobs added in one month in four years, traders were more focused on the market’s fragility. And they again seemed to be placing more weight on Europe’s debt problems than signs of strength in the U.S.
A computerized sell-off, which might have been triggered by a simple typographical error, sent the Dow Jones industrial average down by a record nearly 1,000 points in about 30 minutes Thursday afternoon. The market started to steady itself and regained two-thirds of that loss before the end of trading.
The 348-point, or 3.2 percent, drop on the Dow was the worst day for the index since February 2009 when the market was headed toward a 12-year low. The Dow has lost 631 points, or 5.7 percent, over the last three days.
Ahead of the opening bell, Dow Jones industrial average futures rose 59, or 0.6 percent, to 10,516. Standard & Poor’s 500 index futures rose 6.40, or 0.6 percent, to 1,128.80, while Nasdaq 100 index futures rose 7.50, or 0.4 percent, to 1,893.50.
It was too early to tell if the rise in futures Friday was an expectable bounce from such a steep drop or a sign that traders were rethinking the week’s heavy selling. But the Treasury market did give some hints of at least a temporary return to more stable trading. Prices fell sharply after Thursday’s big gains, a sign that investors were no longer in need of a safe place for their money. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.47 percent from 3.40 percent late Thursday.
Stocks were down overseas but also showing signs of stabilizing. Britain’s FTSE 100 fell 0.4 percent, Germany’s DAX index dropped 0.7 percent and France’s CAC-40 index was down 0.5 percent. Japan’s Nikkei stock average fell 3.1 percent; the Tokyo markets were closed before trading began in Europe.
The Labor Department also reported Friday that the unemployment rate rose to 9.9 percent as people streamed back into the market looking for work.
The jump in job creation was due in part to the hiring of 66,000 temporary government workers to conduct the census. But private employers across a range of industries were hiring again.
It likely would have taken a much higher jobs creation figure to stir the stock market, which is still smarting after Thursday’s drop. And the catalyst for the entire week’s selling, Europe’s debt problems, remains a concern for traders.
U.S. stocks were already sharply lower Thursday even before the big mid-afternoon plunge. Investors were concerned that a $140 billion bailout for Greece would be unable to stop a spread of debt issues across Europe that could unravel a global economic recovery.
Leaders of the 16 countries that use the euro are meeting in Brussels Friday to complete the Greek rescue plan and determine how to avoid future debt crises. Germany’s parliament is expected to vote on its contribution for the loan package. As the largest country using the euro, Germany is on the hook for the largest portion of the bailout, which is also being funded by the International Monetary Fund.
Greece’s parliament passed an austerity plan Thursday night, despite heavy protesting from citizens throughout the country. It needed to approve the plan to receive the bailout money, a portion of which will be needed to cover debt payments on May 19.
The dollar, which has been rising sharply particularly against the euro, retreated early Friday. Investors had been pouring money into the dollar and pulling out of the euro because of worries that the European common currency could eventually collapse under the weight of the mounting debt problems.
Gold and oil both rose.
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