U.S. Stocks Fluctuate as Energy Gains Offset Jobs, Factory Data

By Lynn Thomasson

Sept. 2 (Bloomberg) -- U.S. stocks fluctuated as gains in energy shares offset a slump in consumer companies following data showing bigger-than-estimated job cuts and slower-than- forecast growth in factory orders.

ConocoPhillips and Devon Energy Corp. led energy stocks higher as oil climbed. Brown-Forman Corp. jumped 5.5 percent after the maker of Jack Daniel’s whiskey reported first-quarter earnings that rose more than analysts estimated. Bank of America Corp., General Electric Co. and McDonald’s Corp. dropped as ADP Employer Services said employers cut 298,000 jobs last month.

The Standard & Poor’s 500 Index decreased 0.1 percent to 997.36 at 11:16 a.m. in New York. The Dow Jones Industrial Average added 2.57, or less than 0.1 percent, to 9,313.17. The MSCI World Index of 23 developed countries slid 0.6 percent.

“Everything is not rosy right now,” said Jason Cooper, who manages $2.5 billion at 1st Source Investment Advisors in South Bend, Indiana. “Given the gains we’ve had in the past few months, people are skittish about whether it’s sustainable.”

Asia’s regional benchmark tumbled the most in two weeks and European shares extended declines after the employment report.

Speculation that banks have risen too far, too fast and will likely post more losses amid a weakening commercial real estate market pushed U.S. stocks lower yesterday. Banks, brokerages, insurers and asset managers in the S&P 500 have collectively slumped 6 percent so far this week, trimming a 128 percent surge since the group’s low on March 6.

The S&P 500, which has jumped 48 percent from a 12-year low six months ago, was valued at about 19 times the profits of its companies at the end of last week, the highest ratio since June 2004, according to weekly data compiled by Bloomberg.

‘Time for a Breather’

“After the strong rally it’s time for a breather,” said Sandro Rosa, an equity strategist at Clariden Leu AG in Zurich, which manages about $88 billion. “People are nervous and want to feather their nests. The earnings season is over and a new driver is missing. Valuations are no longer a screaming buy and earnings will have to rise to justify the prices.”

Energy producers in the S&P 500 collectively added 0.5 percent, the most among the 10 main industries, as oil prices increased following a government report that showed U.S. gasoline supplies declined the most since May as consumption increased.