February 5, 2010, 4:00 pm EST — Closing Thoughts … The Standard & Poor’s 500 index closed up 3.08 to 1066.19, even as the index registered its fourth straight weekly of declines. FEAR RULES, while the market staged a late day rally suggests convergence of ideas. Indeed, the wide trading came amid the latest signs that several weak European governments will have trouble getting their massive deficits under control. Concurrently, the Labor Department offered the “spin of the week” — the U.S. unemployment rate unexpectedly fell in January to 9.7 percent from 10 percent, even though Stockville expected an uptick. Employers cut 20,000 jobs, more than the 10,000 Dartline expected. The two numbers are calculated from different surveys to give the Obama Nation report the look of “book cooking” and misinformation. Furthermore, the Labor Department revised some of its past statistics lower, painting a grimmer picture about how bad the economy was hurt during the recession. The economy has shed 8.4 million jobs since the downturn began in December 2007, compared with a previous estimate of 7.2 million. December job cuts were also revised for the worse. In the final month of 2009, employers cut 150,000 jobs, not the 85,000 previously reported.The jobs report came as more troubling news emerged in Europe that Portugal and other weak economies were falling behind in their efforts to control their deficits. Portugal’s opposition parties defeated a government austerity plan Friday and passed their own bill allowing the country’s autonomous regions to rack up even more debt. That raised new questions about European countries’ ability to control their swollen budget deficits, which are undermining faith in the region’s euro currency. Greece and Spain are also grappling with massive budget deficits. The worries about Europe are another bullet point for investors who for weeks have been concerned about China’s efforts to keep growth in check as well as plans in Washington to place more restrictions on big banks. … The Federal Reserve also said during afternoon trading that consumers borrowed less for an 11th straight month in December, but that total borrowing fell far less than expected. The drop of $1.8 billion was less than the decline of $9 billion analysts had expected. That fueled hopes that consumer spending will increase. …
Benchmark crude for March delivery on Friday lost $1.95, nearly 3 percent, to settle at $71.19 a barrel on the New York Mercantile Exchange. Oil plunged as low as $69.50 a barrel earlier in the day. That’s the cheapest oil has been since Dec. 15. Stronger dollar and persistent doubts about the health of the global economy caused the weakness. Crude prices have now dropped more than 14 percent since cresting at a 15-month high of $83.18 a barrel on Jan. 6. Energy prices were propped up earlier in the year by predictions that China, India and other developing nations would aggressively boost petroleum imports to feed their growing economies. But China has since taken steps to control risky bank lending and to cool off its economy. Meanwhile, Greece, Portugal and Spain are dealing with massive budget deficits, and their continued troubles helped push the euro lower Friday. A two-day jump in prices earlier in the week evaporated as the dollar surged against the euro. Analysts said they also suspected investors who had snapped up oil contracts changed their minds and were trying to get rid of them fast, before the weekend. “It’s quite obvious that someone blew up” in their oil investments, analyst and trader Stephen Schork said. “I’m not sure who it is, but someone is bleeding right now.” The U.S. Dollar Index, which measures the greenback versus other major currencies, jumped Friday to its highest level since July. Oil, which is priced in U.S. currency, tends to fall when the dollar strengthens and makes barrels more expensive for holders of foreign money. Add the fact that Americans are burning much less fuel than previous years and you have the perfect excuse to sell the blank stuff. The Energy Information Administration said this week that U.S. petroleum consumption has dropped for four straight weeks. “There’s a lot of oil sloshing around out there,” said Jim Ritterbusch, president of energy consultancy Ritterbusch and Associates. “If I were to give a fair price for oil it would be closer to $60″ a barrel. In London, Brent crude gave up $2.54 to settle at $69.59 on the ICE futures exchange.