Friday, July 2, 2010

Wall Street flat

Wall Street flat after 4-day slide and payrolls data

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A trader works on the floor of the New York Stock Exchange in New  York, June 30, 2010. REUTERS/Shannon Stapleton

NEW YORK | Fri Jul 2, 2010 10:24am EDT

NEW YORK (Reuters) - Wall Street indexes were trading around the break-even point on Friday after government data showed employment in the United States fell in June for the first time this year but not as much as some had expected.

Non-farm payrolls dropped by 125,000, the largest decline since October, largely because temporary government jobs for the census decreased by 225,000, the Labor Department said.

With fears of a double-dip recession mounting after a flurry of weak data recently, the report was closely watched to assess the strength of the economic recovery. Some analysts said that while the numbers were grim, they were not as weak as the most pessimistic forecasts.

"There were probably fears in the back of some people's minds that the private payrolls could even be worse," said Nigel Gault, chief U.S. economist at IHS Global Insight in Lexington, Massachusetts.

"Clearly this is telling us we've lost momentum and growth is slowing. (But) Has it slowed so much to drive us into a double dip? I think probably not."

Also, the unemployment rate fell to 9.5 percent, the lowest level since July, though this was because people left the labor force.

The Dow Jones industrial average .DJI was up 5.64 points, or 0.06 percent, at 9,738.17. The Standard & Poor's 500 Index .SPX was up 1.30 points, or 0.13 percent, at 1,028.67. The Nasdaq Composite Index .IXIC was up 2.81 points, or 0.13 percent, at 2,104.17.

Another drag on the market was data showing U.S. factory orders dropped more than expected in May, falling 1.4 percent versus a gain of 1.2 percent in the previous month. Analysts in a Reuters survey expected a drop of 0.5 percent.

In Europe, stocks had received a lift from news that Australia ended a damaging dispute with global miners by dumping its "super profits" tax for a lower resources rent tax backed by big miners. Mining shares such as Rio Tinto (RIO.L) and Xstrata (XTA.L) were one of the top gainers.

Biotech shares will be in the spotlight. French drugmaker Sanofi-Aventis SA (SASY.PA) is preparing an acquisition in the United States that may be worth $20 billion or more, Bloomberg reported on Thursday, citing people familiar with the matter. A Sanofi-Aventis spokesman declined to comment.

British power supply systems maker Chloride (CHLD.L) has recommended a $1.5 billion takeover by U.S. conglomerate Emerson Electric (EMR.N), bringing to an end a long-running bid battle. Emerson Electric shares rose 0.4 percent to $43.85.

Shares of Wilshire Bancorp (WIBC.O) fell 9 percent to $7.75 after the company on Thursday forecast a second-quarter loss.

Major indexes closed lower for a fourth straight day on Thursday after suffering their worst quarter since late 2008.

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