Stocks slip as Nasdaq slides, dollar eases on jobs data

April 6, 2014

New York (Apr 4)   A slide in momentum stocks pulled Wall Street and a measure of global equities lower on
Friday despite a solid U.S. jobs report, while the dollar weakened on views the Federal Reserve will likely continue to
wind down its stimulus.
    The U.S. bond market surprisingly rallied, particularly
five-year Treasury notes, which had been weak lately on fears
the Fed could raise interest rates earlier than anticipated.
    The FTSEurofirst 300 index of European shares
touched a high last seen in 2008 on the jobs data and closed
higher, marking nine straight gains and three consecutive weeks
of higher closes.
    But stocks on Wall Street retreated after stabilizing
earlier in the week as momentum stocks such as biotechs fell for
a second straight session. The Nasdaq biotech index lost
3.2 percent and the Nasdaq composite fell more than 2 percent,
pulling down U.S. stocks and global equities.
     "You've got some big names in there. There is a high
correlation inside of those groups," said Keith Bliss, senior
vice-president at Cuttone & Co in New York. "Managers tend to
trade the entire group as opposed to individual names. So that
of course, is hitting the Nasdaq and everybody else."
    Equities had opened higher on optimism spurred by the U.S.
nonfarm payrolls report, which showed jobs rose by 192,000 in
March, just shy of the 200,000 forecast, after rising 197,000 in
February. The unemployment rate was unchanged at 6.7 percent.
     With a solid pace of hiring for a second month, the economy
appears to be recovering from a winter slowdown.
    A smaller survey of households, from which the unemployment
rate is derived, showed a much bigger surge in employment. That
jump was met by a rise in the number of people entering the
labor force, a show of confidence in the U.S. job market.
    The percentage of working-age Americans with a job reached
its highest level since the summer of 2009.   
    "Overall, people are taking this as a sign there isn't some
sort of underlying weakness in the economy," said Kate Warne,
investment strategist at Edward Jones in St. Louis.
    "It has fit into people's belief that most of the weakness
we saw earlier was due to the weather and not something really
changing about the economy."
    The S&P 500 hit a fresh record high before retreating.
MSCI's all-country world stock index fell 0.07
    The Dow Jones industrial average fell 40.17 points,
or 0.24 percent, to 16,532.38. The S&P 500 lost 9.96
points, or 0.53 percent, to 1,878.81 and the Nasdaq Composite
dropped 83.989 points, or 1.98 percent, to 4,153.75.

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