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The Spokesman-Review Newspaper
Spokane, Washington  Est. May 19, 1883

Stocks end mixed in choppy waters

Madlen Read Associated Press

NEW YORK – Wall Street ended another difficult week with an equally difficult session Friday: Stocks rose, fell, then clawed their way back to a mixed close after the Labor Department released its February jobs report.

But while the market finished well above its lows – the Dow Jones industrials had a modest gain after falling more than 120 points – many market watchers say there’s no reason stocks can’t slide further, even as the major indexes are near 12-year lows.

“My sense is we haven’t discounted all the negatives out there as of yet,” said Rob Lutts, president of Cabot Money Management.

Big institutional investors are still largely waiting for positive signs from the economy before making any major commitments.

As a result, the market is largely being driven by “short” traders, who sell borrowed stock and then buy it back later in hopes that the price will decline in the meantime. That makes for a choppy, unpredictable market – one that analysts expect to stay erratic for the foreseeable future.

“The shorts are having a complete field day in this environment,” said Kent Engelke, managing director at Capital Securities Management in Glen Allen, Va. “Right now you have everybody so fearful, and these shorts are controlling the market.”

Some of the week’s economic data, including retail sales and factory orders on Thursday, were better than expected but not enough to encourage investors to buy. The February jobs numbers on Friday were worse than analysts forecast, but not as bad as some investors had feared; but that also didn’t motivate many investors to take chances on stocks.

Employers cut 651,000 jobs last month, and the unemployment rate jumped to 8.1 percent. The government also revised its December and January job loss figures up to 681,000 and 655,000, respectively.

News of continuing struggles in the banking industry and concerns about General Motors Corp.’s survival are only intensifying the market’s uneasiness. Wells Fargo & Co. became the latest bank to cut its dividend, and the market waited to see if GM would be forced to seek bankruptcy protection.

The Dow Jones industrial average closed the week down 435.99, or 6.2 percent, at 6,626.94. The Standard & Poor’s 500 index fell 51.71, or 7 percent, to 683.38. The Nasdaq composite index fell 83.99, or 6.1 percent, closing at 1,293.85, its lowest point in six years.

The Russell 2000 index, which tracks the performance of small company stocks, fell 37.97, or 9.8 percent, to 351.05.

The Dow Jones Wilshire 5000 Composite Index – a free-float weighted index that measures 5,000 U.S.-based companies – ended at 6,935.38, down 538.61, or 7.2 percent, for the week. A year ago, the index was at 13,164.99.