Markets close down on week
NEW YORK, June 3 (UPI) -- U.S. stock markets closed lower Friday after the Labor Department said only 54,000 jobs had been added to the economy in May.
The number fell far short of the 190,000 jobs economists expected and was far fewer than the 232,000 jobs added in April. The U.S. unemployment rate held at 9.1 percent, but the slack hiring is a tangible jolt that says the recovery has slowed.
The report capped a week of disappointing economic data that sent the Dow Jones industrial average, already down 1.9 percent in May, down further, giving up 290 points in a four-day week.
By close of trading Friday, the DJIA shed 97.29 points or 0.79 percent to 12,151.26. The Standard & Poor's 500 index lost 12.78 or 0.97 percent to 1,300.16. The Nasdaq composite index fell 40.53 or 1.46 percent to 2,732.78.
On the New York Stock Exchange, 860 stocks advanced and 2,158 declined on a volume of 3.5 billion shares traded.
The benchmark 10-year treasury note rose 11/32 to yield 2.991 percent.
The euro rose to $1.4636 from Thursday's $1.4491. Against the yen, the dollar fell to 80.26 yen from Thursday's 80.91 yen.
In Tokyo, the Nikkei 225 index lost 0.66 percent, 62.83, to 9,492.21.
In London, the FTSE 100 index added 0.12 percent, 7.09, to 5,855.01.
Fed watchers ask: What's next?
WASHINGTON, June 3 (UPI) -- Watchers of the U.S. Federal Reserve are speculating on the central bank's next move, given the recent slowdown of the economic recovery.
Economics Professor Phillip Swagel of the University of Maryland, a former Treasury Department official, said the bank's policymakers were "debating this furiously," referring to the option to initiate a third round of quantitative easing after the second round of security purchases -- called QE2 -- winds down at the end of June, The Hill reported Friday.
"The upsides to QE3 are very small. The downside is that the Fed could potentially lose its credibility," Swagel said.
Critics say the quantitative easing program created banks flush with cash, but that cash did not flow to the general economy.
"It's like the roach motel of economic policy. The money goes in and it never comes out," said Daniel Alpert, managing director of Westwood Capital LLC.
When the Fed stops purchasing securities, that doesn't end QE2, precisely. "The liquidity that's being created remains in the system," said Axel Merk, president and chief investment officer at Merk Investments.
Eventually, the Fed will need to figure out how to reduce the enormous portfolio it has built up in the past three years.
But that decision can wait. With the recovery slowing down, what options the Fed has left is a cause for concern.
"Everyone thought a few weeks ago it was impossible to have QE3, and now it becomes a real possibility," Merk said.
Nortel patents auction provokes probe
NEW YORK, June 3 (UPI) -- The U.S. Justice Department is reviewing bids for 6,000 Nortel Networks Corp. patents an expert said represent a mother lode of intellectual property.
"You're acquiring a stockpile of nuclear weapons as far as patents go," said Alexander Poltorak, chief executive of General Patent Corp., The Wall Street Journal reported Friday.
The patents span the technology landscape, including technology used in WiFi, wireless video and Internet searches, the Journal said.
The department is concerned the winning bidder not use the patents to slow down technology innovation. The antitrust division is already reviewing a $900 million bid from Google Inc. and is expected to review bids from Apple Inc. Research in Motion, which makes BlackBerry phones, is also expected to bid on the treasure trove of patents, which will be auctioned June 20.
Fincantieri recants 2,500 layoffs
TRIESTE, Italy, June 3 (UPI) -- A shipbuilder in Italy with plans to cut 2,500 jobs has had a change of heart, electing to scratch the layoff idea in part to restore calm.
"I hope this will help ease tensions," said Giuseppe Bono, chief executive officer at industrial giant Fincantieri, ANSA reported Friday.
Protesters in opposition to the plan had staged demonstrations that turned violent in some locations, and the government stepped in to pressure the company to reconsider its plans.
The company had scheduled the layoffs to trim operating costs in the competitive ship building industry.
