Wall Street falls on job woe, Citi
NEW YORK (Reuters) - Stocks fell on Friday after government data showed the labor market deteriorated further in December, raising investor concerns about the outlook for profits, spending and a deepening recession.
Shares of Citigroup Inc (C.N) fell 5.7 percent after the Wall Street Journal said the bank may sell its Smith Barney brokerage, with Morgan Stanley (MS.N) a possible suitor, prompting question about why it would want to sell one of its relatively healthier businesses.
Payrolls were cut slightly less than expected, but the U.S. jobless rate climbed to its highest in nearly 16 years and the number of jobs lost in October and November was increased, pressuring already weak consumer spending.
Energy shares fell after Chevron Corp (CVX.N) joined a growing list of bellwether companies warning about profits. It slid 1.9 percent, making it one of the top drags on the Dow.
Technology shares also took a beating, causing the Nasdaq to briefly wipe out its 2009 gains, led by shares of Apple Inc (AAPL.O), off 2.3 percent. Microsoft MSFT.O slid 3 percent.
Rambus (RMBS.O) shares fell as much as 40 percent, its biggest slide since becoming a public company in 1997, after a judge ruled on Friday against the company in a patent case with rival memory chip maker Micron Technologies (MU.N).
"There is still a lot of bad news in housing and employment. While the credit situation is beginning to thaw, we're still a sick patient." said Kevin Kruszenski, Head of Listed Trading at KeyBanc Capital Markets in Cleveland.
"People are getting skittish in front of earnings season."
The Dow Jones industrial average .DJI ended down 143.28 points, or 1.64 percent, to 8,599.18. The Standard & Poor's 500 Index .SPX slid 19.38 points, or 2.13 percent, to 890.35. The Nasdaq Composite Index .IXIC fell 45.42 points, or 2.81 percent, to 1,571.59.
Thus far in 2009, the Dow is off 2 percent, while the S&P 500 is down about 1.4 percent.
The sell-off caused the benchmark S&P 500 to mark its worst week since its November 21 intraday bear market low, trimming its advance since then to about 18 percent.
U.S. employers slashed 524,000 jobs from payrolls in December, less than the 550,000 seen in a Reuters poll, but still bringing total job losses for 2008 to 2.6 million, the most since 1945.
Underscoring weakness in the labor market, Boeing (BA.N) said it would cut 4,500 workers or about 7 percent of the workforce in its commercial airplane unit.
Shares slipped 0.8 percent to $44.45.
In warning about its outlook, Chevron, the second-largest U.S. oil and gas company, cited the impact of lower energy prices on exploration and production business. Continued...
