Wall Street shares close lower on concern over economic outlook

NEW YORK (AFX) - Share prices closed lower as the March employment report raised fears of a recession and negative research notes increased the prospect of a negative earnings season, dealers said.    The DJIA fell 126.9 points to 9,791.09, the S&P 500 index shed 23.01 points to 1,128.43. The Nasdaq composite was down 64.61 points at 1,720.39.    Dealers said the stockmarket mood continued to be very fragile, with today's economic numbers raising the prospect of stagflation.    The figures showed a decline in non-farm payrolls in March of 86,000, the largest fall since Nov 1991 and well below economists forecasts of a rise of 74,000. The unemployment rate rose to an in-line 4.3 pct from 4.2 pct in February, its highest rate since July 1999.    Concerns about weakness in the semiconductor sector also increased fears that the earnings season will be time for more disappointment.    Worries regarding rising debt problems at Motorola following a negative CSFB note, coupled with PG&E's filing for Chapter 11 bankruptcy protection, also dampened the mood on Wall Street as it may create a credit crunch in the corporate debt market.    Ryan Beck & Co director of trading Jay Susskind said: "Markets wanted to see good news for the economy and didn't get it.    "It reinforces the view that it will take a bit longer to recover," according to Susskind.    Highlighting the general bearishness of the market, he said there was "not big discrimination," in the session's selling activity. "Everything's just down."    Susskind added that, until corporations regain some of their earlier earnings visibility, he expects indices to continue on their downward move.    "By the end of the second quarter we hope in some stability in some macro economic numbers. Until then the downward trend continues," he added.    Technology stocks lost heavily, pressured by concerns in the chips sector.     Motorola lost more than 25 pct of its value during regular trading hours, closing down 3.45 at 11.50 after a negative note from CSFB questioning the company's debt burden. The company also issued a statement denying market speculation that it is facing a liquidity crisis and affirmed that it had 4.5 bln usd in cash at the end of the first quarter this year.     "Motorola today is financially sound. Any suggestion or erroneous report that Motorola faces a serious liquidity problem is simply not true and is not supported by fact," the company said in a statement.    Intel fell 2 to 23-5/8 after Salomon Smith Barney's Jonathan Joseph issued negative comments about the issue.     Agilent, down 2.82 at 27.80, was pressured after it guided its first-quarter revenue estimate downward and said it is temporarily cutting staff pay by 10 pct in response to "recent dramatic slowing customer demand".    The financial sector was broadly lower, with the banking arena hit particularly heavy on rising indications of a possible recession.    Citigroup was down 2.25 at 42.75, JP Morgan Chase fell 2.11 to 40.39.    The brokerage sector was also under pressure, with Lehman Brothers down 2.42 at 60.00 and Morgan Stanley falling 1.50 at 50.90.	    News Corp ADRs were down 0.79 cents at 30.41 after CSFB analysts lowered their earnings estimates on changed currency assumptions and uncertainty about the economic outlook.	    CSFB is the latest in a number of brokerages to cut estimates on the company in recent weeks.     The wireless telecom sector was in focus after Sprint PCS issued a statement last night in which it reported stronger than expected subscriptions. Sprint PCS was up 1.85 at 21.60. The rest of the sector closed lower, in line with the rest of traditional telecoms, with VoiceStream down 4-5/16 at 92 and AT&T down 1.00 at 20.50.    The defense sector also received a late session recovery after it said it will divest 70 pct of its aerospace unit to Veritas for 270 mln usd. Raytheon was down 0.06 at 30.97, while Boeing fell 0.83 to 55.98.	    The utilities sector continued to be sharply lower after the PG&E bankruptcy filing. PG&E lost 4.18 to 7.20, while Edison International shed 4.39 to 8.25.    Energy providers were pressured as it is unclear how much of their credit will be paid by the bankrupt Californian utilities. Duke Energy fell 2.30 to 40.10, Enron shed 2.20 to 53.50.		

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