Sunday, 04 November 2012 00:00
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U.S. stocks fall as optimism fades after jobs report

U.S. stocks fell, erasing early gains and paring yesterday’s 1.1 percent rally, as better-than- forecast payrolls failed to keep commodity and technology shares from slumping as Americans prepared to pick a president.

Newmont Mining Corp. (NEM) dropped 5.8 percent amid disappointing earnings. American International Group Inc. (AIG) fell 5.6 percent as premium revenue slipped at its main units. First Solar Inc. (FSLR) slumped 8.5 percent after the thin-film solar manufacturer said profit fell in the third quarter.

Starbucks Corp. (SBUX), TripAdvisor Inc. (TRIP) and Priceline.com Inc. (PCLN) all gained at least 11 percent after quarterly profits beat analysts’ estimates. LinkedIn Corp. (LNKD) added 1.5 percent after third-quarter sales exceeded forecasts.

The Standard & Poor’s 500 Index (SPX) fell 0.2 percent 1,425.12 at 11:48 a.m. in New York. The benchmark gauge reversed a 0.5 percent advance after climbing above 1,434, a level watched by traders because it is the average price over the last 50 days. The Dow Jones Industrial Average dropped 38.36 points, or 0.3 percent, to 13,194.26. Trading in the S&P 500 was 5 percent higher than the 30-day average during this time of the day.

The employment data was a “good report that was met with some skepticism,” Larry Peruzzi, senior equity trader at Cabrera Capital Markets LLC in Boston, wrote in an e-mail.

“This election is still too close to call so it may be tough to make any bets. Between the seesawing job reports, the too-close- to-call election, mounting damage cost from Sandy and our biggest city at 50 percent, markets seem to be at a bewildered and confused point.”

Equities advanced earlier as a report showed a net 171,000 workers were added to payrolls in October. The median forecast of 91 economists surveyed by Bloomberg called for an advance of 125,000. The jobless rate rose to 7.9 percent from 7.8 percent as more people entered the labor force.