A surprisingly weak April employment report, while bad news for job seekers, helped push technology stocks higher Friday by sparking optimism that U.S. Federal Reserve policy makers will see the need for another cut in interest rates.
At midday, the tech-heavy Nasdaq Composite Index was up 9.07 at 2,155.27, after an initial drop following the Labor Department’s report of a loss of 223,000 jobs in April.
The decline in nonfarm payrolls was reportedly the biggest since 1991. The unemployment rate spiked up to 4.5 percent in April from 4.3 percent in March.
The news that the economy remained weak last month could spur Fed officials to push interest rates still lower when they meet later this month. The Fed has cut rates four times so far this year in an attempt to jump-start the stalling economy.
The broader market also rebounded following an early drop. The Standard & Poor’s 500 stock index was up 5.51 at 1,254.09 in midday trading, and the Dow Jones Industrial Average was ahead 35.26 at 10,831.91.
Among the biggest Nasdaq movers were Cisco (Nasdaq: CSCO), up 74 cents at $19.40; Oracle (Nasdaq: ORCL), up 4 cents at $16.49, and Sun Microsystems (Nasdaq: SUNW), down 37 cents at $19.43.
Analysts at Sanford C. Bernstein reportedly told investors that Sun’s revenue will not grow as fast as the company predicts.
The E-Commerce Times Index of 15 prominent e-tailers was down 0.4 percent at midday.
eBay (Nasdaq: EBAY) was up 17 cents at $51.68 after the online auctioneer said it will expand into the newspaper classified ad market with a new service that will allow users to check prices in their local papers.
Elsewhere in the e-commerce sector, Priceline.com (Nasdaq: PCLN) was up 33 cents at $6.14, while Autobytel (Nasdaq: ABTL) was down 3 cents at $1.32 and Barnesandnoble.com (Nasdaq: BNBN) was down 4 cents at $2.26.
Rising Despite Losses
Internet consulting company Razorfish (Nasdaq: RAZF) was up 13 cents at $1.35, after officials reportedly predicted that second-quarter results will be better than previously thought. Razorfish posted a loss for the first quarter and said its chief executive and chief strategy officers had stepped down.
Software maker Sapient (Nasdaq: SAPE) was up $1.22 at $13.46, as analysts disagreed about the company’s outlook. Sapient announced a loss for the first quarter and reportedly warned of a weak second quarter as well.
Analysts at WR Hambrecht, CIBC World Markets and Credit Suisse First Boston reportedly downgraded Sapient shares following the report, while First Union Securities was said to have raised its rating.