Please ensure Javascript is enabled for purposes of website accessibility

Third Time's the Charm: Jobs Data Hurts the Dow

By Matt Thalman - Apr 5, 2013 at 1:03PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Higher jobless claims and falling technology stocks aren't quite enough to sink the Dow.

For the third day in a row, the markets have been hit with poor jobs data.

On Wednesday, payroll-processing company ADP reported that private employers only added 158,000 new jobs in the month of March, whereas economists were expecting 200,000 hires. Yesterday, the Department of Labor's weekly jobless-claims report indicated that 385,000 initial claims had been filed the previous week, which was 28,000 more than the week before and 35,000 higher than what was expected. And today, the Department of Labor once again poured on the bad news with its March employment report. The Bureau of Labor Statistics reported that just 88,000 new jobs were created last month. Analysts were expecting a much higher number, which most had pinned around 200,000. 

Although the Dow Jones Industrial Average (^DJI 0.03%) managed to post a strong gain yesterday despite the high jobless claims, as of 12:55 p.m. EDT today it's down 111 points, or 0.76%. The other major indexes are actually performing worse: The S&P 500 has lost 0.95% of its value, and the NASDAQ is down 1.17%.

Some of the largest drags on the markets today come from the world of technology.

Shares of Cisco (CSCO 2.92%) have fallen 2.5% after competitor F5 Networks released an earnings warning. Shareholders need to remember that poor performance by the competition can sometimes be good news. However, concerns that established companies are struggling to keep up with ever-changing technology have investors pulling out of the networking giant today. 

After falling 1.3% yesterday, shares of IBM (IBM -0.91%) are down a further 1.4% today. While Cisco is getting punished for a competitor's weakness today, investors may be punishing IBM for its competition's strength. A recently published independent study indicates that IBM's competitor Oracle now has chips and servers that outperform IBM's similar devices. 

The Dow's darling stock of 2013, Hewlett-Packard (HPQ -3.02%), is down by 1.9% after chairman Ray Lane announced yesterday that he will step down from his position but still hold a seat on the board of directors. Only 59% of shareholders voted to re-elect Lane at the company's recent shareholder meeting, so Lane's move is something of a mixed bag. It likely makes 41% of shareholders happy that he's no longer the chairman yet unhappy that he's still on the board. On the other hand, 59% of shareholders voted to keep Lane, so they may be upset today that he gave in to the minority and decided to step down.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Dow Jones Industrial Average (Price Return) Stock Quote
Dow Jones Industrial Average (Price Return)
^DJI
$31,261.90 (0.03%) $8.77
International Business Machines Corporation Stock Quote
International Business Machines Corporation
IBM
$128.48 (-0.91%) $-1.18
HP Inc. Stock Quote
HP Inc.
HPQ
$34.65 (-3.02%) $-1.08
Cisco Systems, Inc. Stock Quote
Cisco Systems, Inc.
CSCO
$42.94 (2.92%) $1.22

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
330%
 
S&P 500 Returns
115%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/22/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.