Stocks Slip on Unemployment Numbers

Elizabeth Stanton

U.S. stock-index futures slipped, signaling the Standard & Poor’s 500 Index may retreat from an almost three-month high, as an unexpected increase in jobless claims fueled concern the economic recovery is slowing.

Wells Fargo & Co., American Express Co. and Inc. led declines among the largest U.S. stocks after the Labor Department said first-time claims for unemployment insurance climbed by 19,000 to 479,000 last week. Hartford Financial Services Group Inc. fell 3.5 percent as the insurer that repaid $3.4 billion of government aid in March cut its profit forecast. 

Futures on the S&P 500 expiring in September dropped 0.5 percent to 1,119.5 at 9 a.m. in New York. Dow Jones Industrial Average futures slipped 0.3 percent to 10,603, while Nasdaq-100 Index futures fell 0.2 percent to 1,901.25.

“People are worried that the economy is going to slide back into negative growth, which would make it much more challenging to keep the earnings up,” said Robert Lutts, president of Cabot Money Management in Salem, Masschusetts, which oversees $500 million. “What we are seeing is spending on capital, which is going to eventually result in hiring, but it’s going to take some time.”

The S&P 500 has rebounded 10 percent from this year’s low on July 2 as better-than-estimated second-quarter earnings bolstered optimism stock losses this year were unwarranted. The benchmark gauge yesterday rallied 0.6 percent to its highest close since May 17 as faster-than-predicted growth in service industries and jobs also helped to quell concern the economy is slowing.

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