Stocks fall after wild day, Europe woes linger
NEW YORK - Turbulence continued in the stock market Friday, a day after some of the most volatile trading in history.
Traders looked past a surprisingly strong report on the U.S. jobs market and focused instead on Europe's spreading debt crisis and Thursday's plunge. The Dow Jones industrial average was down nearly 1,000 points Thursday afternoon , its largest one-day drop , before recovering most of its losses.
The Dow was off about 140 points in late morning trading Friday, paring some of its earlier losses. But stock prices were fluctuating sharply. Traders remained on edge after questions remained about what caused Thursday's sudden drop, which sent the stocks of several companies briefly to zero.
Technology stocks were particularly hard hit following reports that Nokia Corp. was broadening its legal fight against rival cell phone maker Apple Inc. to include the iPad, Apple's hit new product. Apple shares fell 5 percent in heavy trading.
Meanwhile Europe's debt woes continued to weigh heavily on stocks. Germany's parliament approved Berlin's share of the rescue package after a boisterous debate. However investors still fear that Greece may not make a May 19 deadline to make a debt repayment.
Investors' concern goes far beyond the debt problems in Greece, the smallest economy in the European Union. A further loss of confidence in European government debt could have an impact on other weak countries like Portugal, potentially requiring another difficult bailout process. The debt crisis has already badly undermined Europe's shared currency, the euro.
"You're not concerned about the kid with the cold, but how he spreads it to the rest of the class," said Len Blum, a managing partner at investment bank Westwood Capital. Blum noted that Greece's debt problem could be similar to the subprime mortgage meltdown in the U.S., which quickly spread to other parts of the financial system.
In late morning trading, the Dow fell 141.62, or 1.4 percent, to 10,378.70. The broader Standard & Poor's 500 index fell 17.61, or 1.6 percent, to 1,110.54, while the Nasdaq composite fell 45.80, or 2 percent, to 2,273.84.
Falling stocks outpaced gaining ones by about five to two on the New York Stock Exchange, where volume was 700 million shares.
In economic news, the Labor Department reported that employers added 290,000 jobs last month, far more than expected and the biggest jump in four years. However the jobless rate rose to 9.9 percent from 9.7 percent as more people looked for work.
The big improvement in the jobs report brought some clarity to the biggest question remaining for the U.S. economy: When employers would start hiring again. Despite positive signs in manufacturing and housing, job creation has been lagging far behind other sectors of the economy, a worrisome point for economists. Friday's report may help change that perception.
"It's a good-size number and it had a lot of breadth," said John Silvia, chief economist at Wells Fargo. "There isn't a double-dip out there. The employment situation suggests that we have a sustained economic recovery in the U.S. Companies are hiring people."