Better-than-expected payrolls data failed to save benchmarks from ending in the red on Friday as investors remained apprehensive ahead of the U.S. presidential election. The blue-chip index fell as much as 139 points as companies started to estimate the losses incurred by Hurricane Sandy. All 10 industry groups in the S&P 500 ended in the red.
The Dow Jones Industrial Average (:DJI) tumbled 1.1% to close the day at 13,093.16. The Standard & Poor 500 (S&P 500) declined by 0.9% to finish Friday’s trading session at 1,414.20. The tech-laden Nasdaq Composite Index lost 1.3% to end at 2,982.13. The fear-gauge CBOE Volatility Index (:VIX) surged 5.4% to settle at 17.59. Consolidated volumes on the New York Stock Exchange, American Stock Exchange and Nasdaq were roughly 6.35 billion shares, slightly lower than the daily average of 6.5 billion shares. Declining stocks outnumbered advancers on the NYSE by a wide margin; as for 67% stocks that declined, 29% stocks closed higher.
For the week, the Dow fell 0.1%, the S&P 500 rose 0.2% and the Nasdaq lost 0.2%. Markets were closed on the first two days of the week owing to Hurricane Sandy. On the remaining three days, benchmarks mostly had mixed sessions. Some positive economic reports were released. Among them, the consumer confidence index touched its highest level since February 2008, ISM manufacturing index rose by 0.2 points and construction spending edged up 0.6%. Meanwhile, the number of Americans filing for unemployment benefits for the week ending October 27 decreased by 9,000 to 363,000.
On Friday, the U.S. Bureau of Labor Statistics reported that non-farm payroll employment increased by 171,000 in the month of October, beating consensus estimates of 119,000. Increase in non-farm employment was boosted by professional and business services, health care and retail. Professional and business services added 51,000 jobs, whereas healthcare and retail added 31,000 and 36,000 jobs, respectively. Mining lost 9,000 jobs in October. The unemployment rate was up to 7.9% in October from 7.8% in September, inline with consensus estimates. This was the last jobs report before the U.S. presidential election on Tuesday.
Hurricane Sandy has affected many U.S. companies and forced them to change their outlooks. According to insurance and airline companies, their profits may fall in the coming quarter due to Hurricane Sandy. Delta Air Lines, Inc. (NYSE:DAL) said the company lost $45 million in revenue and $20 million in profit due to Sandy. The company had to cancel more than 3,500 flights. Meanwhile, Verizon Communications Inc.’s (NYSE:VZ) shares dropped 1.4% on Friday after the company said its fourth-quarter earnings may fall significantly in the wake of Sandy’s destruction.
Separately, the U.S. government reported that factory orders jumped 4.8% to $475.4 billion in September, beating consensus estimates of a rise of 4.7%. September’s gain was the biggest jump since March 2011 and it came after a 5.1% decline in August. Shipments were up by 0.9% to $481.3 billion, while unfilled orders increased 0.2% to $981.0 billion. Orders for inventories have risen for three consecutive months, increasing by $3.7 billion or 0.6% to $615.7 billion in September. Inventories hit its highest level since the series was first published on a NAICS basis in 1992.
Coming to the sectors, materials had a bad run and the Materials Select Sector SPDR (XLB) lost 1.8%. Stocks such as E I Du Pont De Nemours And Co (NYSE:DD), The Dow Chemical Company (NYSE:DOW) FMC Corporation (NYSE:FMC), PPG Industries, Inc. (NYSE:PPG) and Eastman Chemical Company (NYSE:EMN) lost 1.9%, 1.2%, 1.0%, 1.5% and 2.2%, respectively.
Apple Inc. (NASDAQ:AAPL) started selling the iPad mini in stores, but the company’s shares fell 3.3%. The Technology SPDR (XLK) fell 1.3%. Stocks such as Hewlett-Packard Company (NYSE:HPQ), Dell Inc. (NASDAQ:DELL), Microsoft Corporation (NASDAQ:MSFT) and SanDisk Corporation (NASDAQ:SNDK) lost 1.7%, 1.9%, 0.1% and 1.6%, respectively.
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