Markets Decline As Employment Report Looms

Semiconductor manufacturers and other technology stocks were among the day's biggest decliners.
Despite declining oil prices, stock markets fell Thursday with semiconductor manufacturers and other technology stocks leading the way. Investors seemed to be waiting for Friday's May employment report to get a read on the U.S. economy.

Our InformationWeek 100 index fell 5.22, or more than 1.6%, to close at 312.85, while the Nasdaq composite fell 28.72, or nearly 1.5%, to 1,960.26. The Dow fell 67.06, or nearly 0.7%, to close at 10,195.91, while the S&P 500 fell 8.35, or more than 0.7%, to finish the day at 1,116.64.

Intel's stock tumbled more than 2% to $27.41 in advance of its midquarter update, but recovered most of the loss in after-hours trading when management raised the midpoint of its projected sales for the quarter. Texas Instruments shares were down more than 3% to $24.34 while Micro Technology stock fell nearly 5% to $14.05, although, like Intel, both recovered somewhat in after-hours trading. The Nasdaq-100 tracking stock closed at $36.03, down 39 cents, or more than 1.0%, on moderate trading volume of more than 82 million shares.

Thursday's declines occurred despite the fact that crude oil futures closed at their lowest levels in three weeks, following news that U.S. petroleum inventories were up last week and the Organization of Petroleum Exporting Countries has agreed to increase oil output by 2 million barrels per day.

On Friday morning, the Labor Department will issue its monthly employment report, which economists expect will show the U.S. economy added 225,000 jobs to payrolls in May. While that would be down from the 288,000 jobs created in April, it would be the fourth straight month of solid job growth. Traders expect rapid growth to push the Federal Reserve to raise interest rates sooner.

The Labor Department said Thursday that unemployment claims for the week of May 29 fell by 6,000 from the week before to 339,000, a slightly higher total than economists predicted. Also, orders for new U.S.-made factory goods fell 1.7% in April, according to the Commerce Department, a steeper drop that the 1.4% decline most observers expected.

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