Investors Get Inflation Scare

Stocks and bonds fell sharply Friday on a stronger than expected monthly payrolls report, and earnings warnings weighed on several tech stocks..

The major indexes all lost 1% and long bond yields rose to 5% on news that the economy added more than 200,000 jobs for the second straight month. More importantly, wages also showed some signs of inflationary pressures, putting a dent in hopes that the Federal Reserve will soon end its two-year rate hike campaign.

The Nasdaq fell 22 to 2339, the S&P 500 fell 13 to 1295, and the Dow lost 96 to 11,120. Volume declined to 2.08 billion shares on the NYSE, and 2.03 billion on the Nasdaq. Decliners led 26-6 on the NYSE, and 20-9 on the Nasdaq. Downside volume was 85% on the NYSE, and 75% on the Nasdaq. New highs-new lows were 163-108 on the NYSE, and 178-48 on the Nasdaq.

Earnings disappointments weighed on several names in the tech sector.

Research In Motion fell 5% after missing estimates and lowering guidance, and Extreme Networks and Internet Security fell on their outlooks.

SafeNet tumbled 19% on a warning and the departure of its CFO. fell 4.7% on another outage.

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