May 19, 2024

Markets Turn Lower on Reports of Japanese Quake

Oil prices, however, continued their surge, climbing above $110 a barrel.

Wall Street markets opened higher after the Commerce Department, in its weekly report on the job market, said that 382,000 people applied for initial unemployment benefits last week, a bigger decline than estimated and down from the previous week’s 388,000. Economists say that the numbers suggest that layoffs are slowing, with Goldman Sachs economists saying that there was overall improvement in the job sector.

In other economic news, the nation’s major retailers reported sales for March that were up 1.7 percent, better than the marginal decline that had been expected.

“That is helping the retail sector and is kind of giving the market a good tone,” Nick Kalivas, an analyst at MF Global, said of the early gains.

But the lift from jobs and the retail sector was temporary. By noon, the three major indexes had turned lower. The Dow Jones industrial average slipped nearly 100 points before recovering. In early afternoon trading, the Dow was down 42.80 points, or 0.34 percent. The Standard Poor’s 500-stock index was down 0.30 percent, and the technology heavy Nasdaq was down 0.16 percent.

The aftershock in Japan, with a preliminary magnitude of 7.4, was also off the northeast coast, where last month’s 8.9-magnitude quake, occurred. While referring to the human costs, analysts pointed out that the economic impact was being weighed by investors, like the potential deceleration of global economic activity, its effect on commodities, and supply and demand disruptions.

“Right now this is going to be the dominant driver of markets, and it will have a broad impact,” Lawrence Creatura, the portfolio manager at Federated Investors, said.

Despite the alarm bells from Japan, the market in the United States was able to brush off other developments from abroad — as expected, the European Central Bank raised interest rates and Portugal requested a bailout.

“From the E.C.B. perspective, Trichet really did not rock the boat,” said Mr. Kalivas, referring to the central bank president, Jean-Claude Trichet. “I think that is creating some stability in the market. I would not call it a bullish factor but it is not bearish. He did not come out and pound the table.”

European indexes also turned lower also after the quake. Germany’s DAX was 0.38 percent lower and the CAC-40 in Paris was down 0.02 percent. The FTSE 100 fell 0.46 percent.

In the United States, retail stocks inched up. Costco was more than 4 percent higher, and the apparel stores Nordstrom’s and Macy’s were more than 2 and 1 percent up, respectively. Bed, Bath Beyond climbed more than 11 percent.

As bond prices declined, the yield on the 10-year Treasury climbed to 3.57 percent from 3.55 percent late Wednesday.

Corporate reports have showed some vibrancy.

“You have had this little wave, a constellation of good earnings,” said Mr Kalivas. “That is kind of adding to a bit of a positive tone.”

Ingersoll-Rand was up more than 2 percent after it raised its quarterly dividend by 71 percent, and announced a $2 billion share buyback program.

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