NEW YORK (CNN/Money) -
Disappointing job growth and another jump in oil prices sent stocks reeling for a second straight session Friday, with the biggest declines in the technology sector.
The Dow Jones industrial average (down 70.20 to 10,055.20, Charts) and the Standard & Poor's 500 (down 8.51 to 1,122.14, Charts) index both fell about 0.7 percent.
The tech-laden Nasdaq composite (down 28.55 to 1,919.97, Charts) index fell about 1.4 percent.
The market closed lower on the week as well, with most of the declines coming Thursday and Friday. For the week, the Dow lost 1.3 percent, the Nasdaq 1.1 percent and the S&P 500 0.8 percent.
Oil prices jumped to another record, closing above $53 a barrel, while Treasury bond prices rallied, pushing yields lower, after the weak jobs report.
Decent earnings from Dow components Alcoa and GE had helped limit stock losses in the morning. But even those issues turned negative by the close, as investors saw broader implications for the economy in the jobs report and oil spike.
"It's a slow recovery and I think the stock and bond markets are reflecting that," said Paul Levine, president of Lifetime Financial Strategies. "Job growth is not picking up at the level we had hoped, oil prices are up above $53 dollars a barrel, and the consumer is strapped."
Next week brings the first big batch of third-quarter earnings reports after a few trickled in this week. Economists surveyed by First Call expect third-quarter earnings to rise about 13.5 percent from the same quarter a year ago.
Companies reporting next week include Intel, Yahoo! and General Motors. (For a detailed look at these and other earnings, click here.)
Economic news is light in the first half of next week, but picks up in the second half. Next Friday brings no less than 8 different reports.
"I think the next really big number for the market is next Friday's retail sales figures," said Stephen Stanley, chief economist at RBS Greenwich Capital. "Up until Friday, investors are going to be focused on oil prices, the earnings, and to an extent, the election."
President Bush and democratic nominee, Sen. John Kerry, meet for the second of three debates Friday evening.
Job growth mild
Employers added 96,000 jobs in September, the Labor Department reported -- a figure that was short of economists forecasts for about 150,000 new jobs. In addition, the August payrolls number was revised downward and the July number upward.
The unemployment rate held steady at 5.4 percent.
While job growth forecasts averaged 150,000, there was a wide range of estimates due to uncertainty about the impact of hurricanes in the Southeast on job growth. That factor helped limit stock losses in the early going.
"The jobs numbers were definitely on the soft side, and so stocks are down," Stanley added.
Oil prices seesawed early but turned higher in the afternoon. Light crude oil for November delivery rose 64 cents to settle at $53.31 a barrel on the New York Mercantile Exchange -- the fourth straight closing high.
The tech sector had problems of its own, with semiconductors leading the declines.
What moved?
Selling was broad-based Friday: 24 out of 30 Dow components closed lower.
Chipmaker Advanced Micro Devices (AMD: down $0.61 to $13.50, Research, Estimates) fell 4.3 percent despite reporting profits that met forecasts late Thursday. The company earned 12 cents a share versus a quarterly loss a year ago and also said sales would grow 10 percent in the third quarter. But on Friday some analysts questioned that growth target, due to broader signs of a slowdown in the sector.
Separately, a judge denied AMD's request to force Intel (INTC: down $0.69 to $20.55, Research, Estimates) to hand over documents for use in a long-running European anti-trust dispute between the chipmakers.
A bearish note on chip equipment makers from Prudential Equity Group sent that sector tumbling. The firm started its coverage of the sector with a "neutral" rating and initiated coverage on various stocks with lukewarm ratings.
Among stocks mentioned in the note, Applied Materials (AMAT: down $0.95 to $16.21, Research, Estimates) tumbled 5.5 percent and Novellus Systems (NVLS: down $1.06 to $26.37, Research, Estimates) sank close to 4 percent.
Other chip shares fell as well, with Intel (INTC: down $0.69 to $20.55, Research, Estimates), the biggest chipmaker, down 3.2 percent.
The Philadelphia Semiconductor (down 13.84 to 389.52, Charts) index, the SOX, lost 3.4 percent.
Lionbridge Technologies (LIOX: down $3.04 to $5.44, Research, Estimates) tumbled nearly 36 percent after warning that third-quarter and full-year results would miss estimates due to weaker sales to its technology customers.
Lionbridge makes Web site testing tools and non-English language versions of software for IBM (IBM: down $0.71 to $86.71, Research, Estimates) and others.
SonicWALL (SNWL: down $1.17 to $5.72, Research, Estimates) fell 17 percent after the maker of web security software warned that quarterly results would miss estimates, due to disappointing sales.
Software maker Manhattan Associates (MANH: down $4.70 to $21.24, Research, Estimates) warned that third-quarter earnings will miss estimates, due to delays in closing certain deals. Shares lost 18 percent.
GE, Alcoa report earnings
In other earnings news, Dow component General Electric (GE: down $0.21 to $33.74, Research, Estimates) reported profits of 38 cents a share early Friday, meeting forecasts, and down from 40 cents a year earlier. But the company also lifted its fourth-quarter earnings guidance to the higher end of its earlier range.
After the close Thursday, Alcoa (AA: down $0.68 to $33.40, Research, Estimates) reported earnings of 32 cents a share, a penny shy of already reduced expectations, though net inched higher from a year earlier. Alcoa had warned last month that results would disappoint.
Market breadth was negative. On the New York Stock Exchange, losers barely edged winners on volume of around 1.29 billion shares. On the Nasdaq, losers topped winners two to one on volume of nearly 1.69 billion shares.
Treasuries rallied after the job report, responding to bets that interest rates can rise more slowly now.
The 10-year note jumped 29/32 of a point, pushing its yield down to 4.13 percent from 4.22 percent late Thursday. Treasury prices and yields move in the opposite direction.
In currency trading, the dollar fell versus the yen and euro.
COMEX gold gained $5 to settle at $424.50 an ounce, rising along with other dollar-traded commodities.
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