CNET también está disponible en español.

Ir a español

Don't show this again

Christmas Gift Guide
Tech Industry

Wall Street frets over unemployment

The jobless rate hits its highest level in nearly four years, and the Nasdaq nears its lowest level for the year.

Weaker-than-expected employment figures weighed on the markets Friday, sending stocks lower at midday. The Nasdaq neared its lowest level for the year, down 7.41 points to 1,698.23.

The Dow Jones industrial average lost 234.99 points to 9,605.85. The Nasdaq composite index fell 17.94 to 1,687.70.

The U.S. unemployment rate hit its highest level in nearly four years in August, with 113,000 workers losing their jobs. The jobless rate climbed 4.9 percent from 4.5 percent in July, the Labor Department said. The news is not a good sign for those looking for an economic recovery.

August's big drop in the number of workers on nonfarm payrolls followed a revised payrolls gain of 13,000 in July that was originally reported as a drop of 42,000 jobs.

Economists surveyed by Reuters had expected the unemployment rate to edge up to only 4.6 percent and payrolls to fall by 33,000 in August. The news could pave the way for yet another interest-rate cut by the Federal Reserve.

In a research note, Merrill Lynch analyst Martin Mauro speculated that there would be another quarter-point cut at the Oct. 2 meeting and "at least one more move before the end of the year." Mauro noted that "manufacturing was especially hard hit, and the hints at improvement from the July report were erased."

There was a slight high note to the day's economic data, however: U.S. wholesale inventories fell a hefty 0.7 percent in August to $299.62 billion, while sales rose 0.6 percent to $227.63 billion. The drop in inventories was the sharpest since a 0.9 percent decline seen in September 1996. That's considered good news, since it could indicate that businesses are finally whittling down an oversupply of goods.

In other news, Intel said sales would be "slightly below the midpoint of the range" previously expected. Intel is closely tracked as a barometer of the beleaguered PC industry, because it provides the majority of processors to PC manufacturers. Shares fell 21 cents to $25.89.

eBay has authorized the sale of up to $1 billion worth of shares, according to documents the company filed with the Securities and Exchange Commission. The filing is what's known as a "shelf registration," which allows a company to register shares in advance and then sell them when it wants to without having to file a new registration each time.

Any money made from the sale would be used for general business purposes, the company said in its prospectus. eBay currently has roughly 283.5 million diluted shares outstanding, according to its most recent earnings report. Its stock was off $2.14 to $52.95.

Good companies need to make sure they have enough cash available, eBay CEO Meg Whitman told an investment conference audience.

"In these choppy markets there may be a lot of speculation--but you should only think about good corporate governance," Whitman said Friday at the Salomon Smith Barney Tech2001 Industry Conference. "We actually have no plans for an acquisition right now."

AOL Time Warner slipped $2.87 to $32.22 after Lehman Brothers analyst Holly Becker trimmed estimates for the company, citing a weaker ad market. Becker lowered revenue estimates for 2002 to $42.2 billion, down from $44 billion, but she did call the company "The premier integrated media company with a uniquely valuable portfolio of assets," adding that "the stock remains the most attractive long-term holding in our universe."

Among other heavily traded tech issues, Sun Microsystems rose 13 cents to $10.59, Oracle gained 14 cents to $11.06, Microsoft slid 62 cents to $55.40, and Cisco Systems was down 4 cents to $14.36.

Amazon.com rose 36 cents to $8.51, and Yahoo fell 35 cents to $10.75.

Staff and Reuters contributed to this report.