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Spokane, Washington  Est. May 19, 1883

Amazon, productivity news hurt markets

Associated Press

Investors disappointed with lower-than-expected earnings from Amazon.com Inc. and low productivity gains from U.S. workers pushed stocks lower Thursday, ending Wall Street’s three-day string of gains.

The losses, for the most part, were minimal — an encouraging sign after a difficult January — and analysts said most investors simply sat out of trading while waiting for today’s job creation report from the Labor Department, a key barometer of economic activity. However, Amazon’s earnings dragged tech stocks down significantly.

“Today’s trading is overwhelmed by Amazon.com,” said Arthur Hogan, chief market analyst at Jefferies & Co.

The Dow Jones industrial average fell 3.69, or 0.03 percent, to 10,593.10.

Broader stock indicators also lost ground. The Standard & Poor’s 500 index was down 3.30, or 0.28 percent, at 1,189.89, while the tech-focused Nasdaq composite index dropped 17.42, or 0.84 percent, to 2,057.64.

Most major corporations have now reported fourth-quarter earnings, which means the market will be turning to economic indicators for guidance. The government’s employment report will be “the biggest thing all week,” Hogan said. Analysts expect around 200,000 workers were added to the rolls in January.

In economic news, the Labor Department reported that productivity, or output per worker, rose at an annual rate of just 0.8 percent in the last three months of 2004. It was the smallest quarterly increase in almost three years.

The report could indicate that companies are unable to increase their productivity as fast as they have in recent years, forcing them to hire more workers if they want to boost output.

Declining issues outnumbered advancers by about 4 to 3 on the New York Stock Exchange, where preliminary consolidated volume came to 1.94 billion shares, compared with 2 billion on Wednesday.

The Russell 2000 index of smaller companies was down 2.66, or 0.42 percent, at 629.32.

Overseas, Japan’s Nikkei stock average fell 0.16 percent. In Europe, Britain’s FTSE 100 closed down 0.16 percent, France’s CAC-40 was down 0.58 percent for the session, and Germany’s DAX index was down 0.34 percent in late trading.