U.S. stocks slipped Wednesday morning after job data showed that sectors hit hardest by the credit crunch were seeing a slowdown in hiring, and more layoffs.
Employment data released by payrolls firm Automatic Data Processing said nonfarm jobs grew by 58,000 from August to September, on an adjusted basis, up from a revised 27,000 for July to August. However, two sectors of the economy battered by the credit crunch saw job numbers continue to decline. Employment in residential construction fell by 20,000, and employment in financial services dropped by 7,000 in September.
Another key figure, layoffs, came in nearly 10% lower, as employment consulting firm Challenger, Gray & Christmas, reported September’s layoffs totalling 71,739, down from August’s 79,459.
Morgan Stanley and Bear Stearns, which both announced layoffs this week--600 and 300, respectively, in their mortgage units--were hanging tough Wednesday. Bear was off 69 cents, or 0.5%, at $127.88, after gains early in the week, while Morgan Stanley was up 44 cents, or 0.7%, at $66.54, to maintain its rally.
Home builders continued to have a strong start to the fiscal fourth quarter, despite the litany of problems that battered the industry over the past few months. Pulte Homes was soaring for a third straight day, up $1.32, or 8.5%, to $16.82, while Lennar rose $1.54, or 6.2%, to $26.26, and Centex was $1.03, or 3.6%, higher at $30.301, as investors tried to reap the benefits of an expected recovery.
Of course, if the rise in share prices is the result of anticipation for more Federal Reserve rate cuts later this month, the market may be set up for a fall. The central bank may choose not to slash rates further.
The major averages were slightly lower Wednesday, down about 0.2% each. The Dow Jones industrials average was down 33 points, the Nasdaq was 5 points lower, and S&P 500 was off 3 points.
Email This Page!