May 02 - Summary: The positive impact on Wall Street from stronger-than-expected job growth and a plunge in the jobless rate was short lived as bloodshed in Ukraine adds to fear Russia may invade Ukraine. Conway G. Gittens reports.
It's the first Friday of the month and that means one thing - Wall Street is fixated on jobs. Employers added to payrolls in April at the fastest pace in more than two years, with hiring across the board, and figures for February and March upwardly revised as well. Unemployment lines shrank to a 5-1/2 year low of 6.3 percent. But - there always seems to be a "but" lately - unemployment shrank because more than 800,000 people left the workforce last month. Chris Geczy of the Wharton School/University of Pennsylvania: SOUNDBITE: CHRIS GECZY, FINANCE PROFESSOR, WHARTON SCHOOL OF BUSINESS, UNIVERSITY OF PENNSYLVANIA (ENGLISH) SAYING: "What you're finding is that many are getting discouraged and so the broader numbers -unemployment numbers -are improving and in fact are also at all-time lows but the mix is changing, those who are discouraged, those who are pulling themselves out or those who would like a full-time job but can only get a part time job are fairly stable." That's why some economists say Friday's numbers won't significantly alter Federal Reserve policy. The stock market largely took the numbers in stride with the Dow, the Nasdaq, and the S&P 500 barely reacting. For the week, blue chips rallied under one percent and the Nasdaq was up 1.2 percent. Yields on the 10-year note fell to a three-month low but that had more to do with news concerns about Ukraine. Clashes broke out in several cities between pro-Russian activists and pro-Ukrainian supporters. The violence is especially intense in eastern Ukraine, in one of the deadliest outbreaks of violence since February. And fears are growing of a Russian invasion after Moscow described one incident involving Ukranian forces as a "punitive operation." Meanwhile in Washington, President Barak Obama and German Chancellor Angela Merkel emerged from talks warning Russia will face more sanctions if it interferes with Ukraine elections near the end of the month. An uptick in geopolitical jitters sent investors looking for a place to hide - gold rallied in its biggest gain in two months. In company news, Pfizer upped its bid to $106 billion but AstraZeneca says that offer still "substantially undervalues" the British drugmaker and rejected the higher proposal. Shares of Pfizer - down more than a percent, while AstraZeneca moved lower in London. Stocks in London nudged higher on Friday but Germany and France were down.