News at a Glance
Bearish Week: Stocks finish on an upswing, but lower on the week.
August Vacation: U.S. lost 84k jobs; unemployment hit 6.1%.
Crude Drops: Oil prices fall below $107 a barrel.
Merrill Marred: Sees rating cut to "sell" by Goldman.
The Lowdown
Stocks finished the week on an upswing, as investors came back to financials, but that buying activity paled in comparison to the broad selling that occured the day before.
After wavering throughout most of the day, traders left stocks fairly flat on Friday, leaving the major indexes in a deep hole after Thursday's selloff. The Dow Jones Industrial Average finished up 33 points at 11221, or 323 points below where it began the short week.
The broader indexes ended mixed. The Nasdaq dropped 3 to 2256, and the S&P 500 rose 5 to 1242.
Gains in financials and consumer staples helped offset losses in energy on Friday. Crude oil prices pulled back as the dollar rose and traders showed concern over what the latest jobs report could mean for demand. By 4:03 p.m., oil traded down $1.49 on the day at $106.40 a barrel.
Before the turnaround, traders had balked at a report showing the economy shed 84,000 nonfarm jobs in August, or about 9,000 more than economists were expecting. Most of the losses came from the housing, auto and manufacturing sectors. At the same time, the unemployment rate jumped to 6.1%, its highest point since December 2003.
The labor data were consistent with Thursday's reports on weekly jobless claims, which have ballooned over the last month, and job losses in the private sector. Those reports triggered a selloff that sent the major indexes to losses of about 3% each.
Corporate News
Merrill Lynch (MER) saw its rating cut to "sell" by Goldman Sachs (GS) on a prediction for more write-downs, Reuters reported. Merrill also had its third-quarter earnings forecast reduced by the brokerage. Goldman now expects to Merrill to lose $5.75 a share, down from a prior estimate of $4.75 a share.
Assurant (AIZ), a New York-based insurer, agreed to acquire the warranty management unit of General Electric (GE) in a deal worth $25 million, the firm said. Assurant also agreed to market the extended warranties on GE devices in the U.S. over the next decade. The sale is consistent with GE's recent efforts to streamline its business and reduce overhead during the economic slowdown.
Dell (DELL) plans to sell off most of its factories, if not all of them, to lower its costs and remain comptetitive, The Wall Street Journal reported, citing anonymous sources. Dell is aiming to shed itself of the facilities over the next year and a half. The firm's in-house mass-production factories had helped drive its early success, but as the market for individualized machines increased, the old model became obsolete.
The Economy
The economy lost 84,000 nonfarm jobs in August, compared to a revised loss of 60,000 jobs in July, the Labor Department said. The August unemployment rate rose to 6.1%, up from a July rate of 5.7%. Hourly earnings rose by 7 cents, or 0.4%, keeping pace with a comparable revised increase in July. The average workweek remained unchanged at 33.7 hours. Economists had expected a 75,000-job drop in payrolls, an unemployment rate of 5.7%, an hourly wage boost of 0.3% and an average workweek of 33.6 hours. REPORT
ReadMe
Motley Fool on freaking out: The Dow lost 345 points yesterday, but that doesn't mean it's time to panic. STORY
The New York Times on oil prices: Members of a OPEC are looking for a sweet spot at which to set crude prices -- a price point high enough to maximize profits but low enough to maintain interest among buyers hobbled by the slowdown. STORY
BusinessWeek on office space: The credit crunch is slamming the commercial real estate markets in London and Tokyo. STORY
WatchMe
TheStreet.com on China: The Olympics may be over, but James Altucher, the founder of Stockpickr.com, suggests investing in Chinese travel stocks. VIDEO
Forbes on taming the bear: Economists offered a few tips before Thursday's big selloff, including shorting oil and picking up equities that move with interest rates. VIDEO
Forbes Top 20 TV Cash Queens: The magainze offers a countdown of the wealthiest women in prime time. E!, 9 p.m.
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