Markets Pare Early Losses, End Week With Small Gain

September 5, 2008 4:55 p.m. EST

New York, NY (AHN) - U.S. markets sold off early sparked by an August unemployment rate that hit 6.1 percent. However, a rally in financials and agricultural stocks helped markets turn positive.

The Labor Department reported August unemployment rate before the open, at 6.1 percent, unemployment now stands at a five year high. All three major indices opened the session lower on the news and continued to sell off for the better part of the morning.

Stocks were able to rally in the afternoon when financials received heavy buying interest after news surfaced that Blackstone Group and KKR are each looking to buy parts of the investment banker's real estate and asset management businesses.

The Dow Jones Industrial average traded down more than 1 percent early on but pared losses and posted a 32 points gain, or 0.3 percent. Advancers and decliners were relatively even within the index. Shares of Bank of American and Citigroup were strongest, up 5.3 percent and 4.2 percent, respectively.

The S&P 500 rallied as well, adding 5 points or 0.44 percent after trading lower by 1.6 percent. The financials led the charge higher as the sector added 3.2 percent.

The Nasdaq Composite rallied off lows but closed with a modest loss of 3 points or 0.14 percent. Big-cap tech names failed to move positive. Google, Research in Motion, and Apple all closed the session lower.

The semiconductor sector was strong moving 2.2 percent higher sparked by news that Samsung may acquire SanDisk.

Crude oil fell again, down $1.66 a barrel, settling at $106.23, its lowest closing price since April.

For the week, the Dow Jones Industrials lost 2.7 percent while the S&P 500 fell 3.1 percent. The Nasdaq Composite was hit the hardest, shedding 4.6 percent for the week.

In other economic news, mortgage delinquencies for the second quarter totaled 6.41 percent, up from 6.35 percent in the first quarter.