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Stocks Fluctuate; Dow Down 3.48

October 8, 1999

NEW YORK (AP) _ Stock prices fluctuated in early trading today as investors tried to determine whether the government’s employment report signaled that inflation was accelerating.

In the first hour of trading on Wall Street, the Dow Jones industrial average was down 3.48 at 10,533.57.

Broader stock indicators were mixed. The Standard & Poor’s 500 index was up 0.58 at 1,318.22 and the Nasdaq composite index was down 21.25 at 2,839.45.

Stocks seesawed after the Labor Department reported that employers cut their payrolls by 8,000 jobs in September, the first drop since January 1996. Analysts had expected companies to add 220,000 jobs.

But even with the decline in jobs, wage pressures rose in September. Average hourly earnings, a key gauge of inflation pressures, grew by 0.5 percent to $13.37 in September, much sharper than the 0.2 percent increase in August.

The Labor Department also said the nation’s unemployment rate was unchanged at 4.2 percent in September, a 29-year low.

The report sent mixed signals to the stock market. There were relief over the decline in job growth, but there also was concern that the rising wages could mean inflation is picking up momentum.

Investors worry that any signs of rising inflation may cause the Federal Reserve to raise interest rates for the third time this year. The Fed boosted rates twice this summer to try to keep the economy from overheating and to head off a resurgence of inflation.

Declining issues outnumbered advancers by a 4-to-3 margin on the New York Stock Exchange, where volume came to 111.35 million shares, down slightly from Thursday’s early pace.

The Russell 2000 index fell 1.65 at 428.11.

Overseas, Japan’s Nikkei stock average rose 0.41 percent. In afternoon trading, Germany’s DAX index was down 0.3 percent, Britain’s FT-SE 100 was down 0.3 percent, and France’s CAC-40 was down 0.6 percent.

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