By Donna Kardos
NEW YORK (MarketWatch) — U.S. stocks tumbled Friday, putting the market on pace for its second-straight weekly drop, as investors fretted over the potential impact of oil’s climb above $100 a barrel.
The Dow Jones Industrial Average fell 139 points, or 1.1%, to 12119. All 30 of the measure’s components were in the red. DuPont led the decline with a 2.4% drop, while General Electric shed 2.3% and Hewlett-Packard lost 2.1%.
The Nasdaq Composite declined 0.8% to 2777. The Standard & Poor’s 500-stock index fell 1.1% to 1317, with all its sectors in negative territory.
The day’s declines put the market into negative territory for the week, with the Dow recently down 0.3% on the week. If the measure closes lower on the week, it would mark its second-straight weekly drop and its first time posting back-to-back weekly declines since August.
The slump came as crude-oil futures trade near $104 a barrel after Libya’s capital saw sporadic violence during antigovernment protests, as a heavy clamp-down on the city by Col. Moammar Gadhafi spread fear among residents.
Meanwhile, more than 100,000 protesters gathered in the Bahraini capital for the largest demonstration since protests erupted in the Sunni-ruled kingdom almost three weeks ago, escalating pressure on the ruling Al-Khalifa family to accept sweeping political reforms. And Yemeni soldiers fired rockets on protesters in the restive northern province of Amran, killing three people and injuring seven others, according to a Shia rebel spokesperson.
The escalating violence added to investors’ worries as they kept an eye on rising energy prices.
“The problem with higher oil prices is that it acts as an indirect tax on consumers and businesses,” said Adam Sarhan, chief executive of Sarhan Capital. He noted that the rise in oil prices comes as investors are also beginning to wonder how the economy will perform after the Federal Reserve winds down its stimulus program in June.
Sarhan added, “What we’re seeing now is a confluence of two factors: Can the economy continue growing without the Fed’s help, and how will the economy continue to grow if oil spikes higher?”
Investors were uninspired by government data showing nonfarm payrolls rose by 192,000 last month, missing expectations for a rise of 200,000.
However, the unemployment rate, which is obtained from a separate household survey, fell to 8.9% last month, the first time it has slipped below 9% since April 2009. It improved on expectations for the jobless rate rising to 9.1% from January’s 9%.
The data also showed average hourly earnings of all employees increased by a penny to $22.87.
Some said the mixed report might actually be positive for the market with regard to how the Federal Reserve might react.
“This is the best of all worlds,” Jim McDonald, chief investment strategist at Northern Trust said. “Having moderate, sustained job growth will allow the Fed to reduce the stimulus and liquidity programs at a deliberate pace,” whereas job growth in the 400,000 range at this point in the recovery would likely push the Federal Reserve off the sidelines, he said.
The U.S. Dollar Index, tracking the U.S. currency against a basket of six others, slipped 0.1%. Treasurys rose, pushing the yield on the 10-year note down to 3.49%. Gold futures rose.
Among stocks in focus, Marvell Technology tumbled 9.8%. The chip maker’s fiscal fourth-quarter earnings rose 8.8%, but came in at the low end of the company’s projections, and it forecast disappointing first-quarter results on weakness in the mobile and wireless markets.
Citigroup slipped 3.1%, and Goldman Sachs Group shed 2.2%, after Bank of America Merrill Lynch downgraded its investment ratings on the stocks to “neutral” from “buy.” The firm cited expected weakness in first-quarter results from the two banks.
By Donna Kardos