USA: U.S. stocks are down in early trade, driven by negative jobs data and a slump in technology shares

Record ID: 805347

  • Title: USA: U.S. stocks are down in early trade, driven by negative jobs data and a slump in technology shares
  • Date: 14th November 2008
  • Summary: (BN13) NEW YORK CITY, NEW YORK, UNITED STATES (NOVEMBER 12, 2008) (REUTERS) (SOUNDBITE) (English) ART HOGAN, JEFFERIES & CO. CHIEF MARKET STRATEGIST, SAYING: "The real belief is that with the pace of the U.S. economy and the slowdown that we're seeing, and the lay-offs that have been announced, we're going to see those numbers go higher before they go lower."
  • Embargoed: 29th November 2008 12:00
  • Keywords:
  • Location: Usa
  • Country: USA
  • Topics: Finance
  • Reuters ID: LVA817DUVHAQNARNY1GQ17305666
  • Story Text: U.S. stocks tumbled for a fourth straight day on Thursday (November 13) as investors dumped technology and financial shares following disappointing outlooks from bellwethers including Intel Corp, that added to fears about the extent of the global economic slump.
    The falls were further compounded by new employment data which showed an increase in the number of workers drawing jobless benefits. The number of U.S. workers filing new claims for jobless benefits rose by an unexpectedly steep 32,000 last week to 516,000, the highest level since the weeks following the September 11, 2001 attacks, the Labor Department said.
    Chief market strategist at Jefferies & Co., Art Hogan, said the figures had had a big impact on the market and that he expected the news to get worse.
    "The real belief is that with the pace of the U.S. economy and the slowdown that we're seeing, and the lay-offs that have been announced, we're going to see those numbers go higher before they go lower," Hogan told Reuters.
    Technology stocks fell after Intel Corp slashed its revenue forecast, in the latest sign of falling global demand for computers and other electronic products. The biggest maker of chips for personal computers said it expects fourth-quarter revenue of 9 billion dollars (USD), plus or minus 300 million dollars (USD). That was much worse than Intel's October forecast of 10.1 billion dollars (USD) to 10.9 billion dollars (USD), and far short of the average analyst estimate of 10.3 billion dollars (USD) according to Reuters Estimates.
    Jefferies said the warning was weighing on the entire sector, and that he expected a flow-through effect.
    "Obviously Intel is basically speaking to the slowness in PC sales and clearly that affects most of technologies. That's why you're seeing the Nasdaq Composite Index underperforming, the S & P and the Dow for good reasons. The things that are related to PCS are far and abroad, so we're going to see a lot of pressure coming into the software industry and that's being clearly reflected in the names today," Jefferies said.
    The economic downturn was also having a a severe impact on the financial sector.
    "The mood is pretty bad. You look at this and on a daily basis you're finding out about 10 per cent lay-offs across the board at most of the major investment banks, commercial banks, etc. We've already lost about 150 thousand jobs in this industry already, and there's more to come.
    Everybody comes into work looking to see who's next on the chopping block and it's a tough way to run a business," Jefferies said.
    By noon the Dow Jones industrial average had slid 90.01 points, or
    09 percent, to 8,192.65.
  • Copyright Holder: REUTERS
  • Copyright Notice: (c) Copyright Thomson Reuters 2011. Open For Restrictions - http://about.reuters.com/fulllegal.asp
  • Usage Terms/Restrictions: None
Register