Stocks sink after dismal June jobs report
After a strong week in gains, Friday's jobs report, which put the June unemployment rate at 9.2 percent, pulled stocks down
An unexpected drop in hiring put an end to the excitement that had been bubbling up on Wall Street over the past two weeks.Skip to next paragraph
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Stock indexes fell sharply Friday, erasing most of the week's gains, after the government reported that U.S. employers created the fewest number of jobs in nine months. The 18,000 net jobs in created in June were a fraction of what many economists expected and dampened hopes that the economy was improving. Private companies added jobs at the slowest pace in more than a year. The unemployment rate edged up to 9.2 percent, its highest level this year.
A broader measure of weakness in the labor market was even worse. Among Americans who want to work, 16.2 percent are either unemployed or unable to find full-time jobs. That was up from 15.8 percent in May.
"There's just a lot more evidence than before that we're in an extended weak patch," said Brian Gendreau, market strategist for Cetera Financial Group. He said private economists will likely reduce their projections for overall economic growth this year.
The Standard and Poor's 500 index fell 9.42 points, or 0.7 percent, to 1,343.80. That eliminated the index's gains from Thursday and left it with a 0.3 percent gain for the week.
The Dow Jones industrial average lost 62.29, or 0.5 percent, to 12,657.20. The Dow, which had been down by as much as 150 points Friday, had only its second down day over the past nine. The Nasdaq composite dropped 12.85, or 0.4 percent, to 2,859.81. It was its first loss in two weeks.
Companies whose business would be most affected by a weakening economy were hit hardest. Bank of America Corp., General Electric Co. and Boeing Co. were among the biggest decliners in the Dow average.
Expectations for Friday's jobs report were raised Thursday after payroll processor ADP said that private companies added more than 150,000 jobs in June. While the ADP report does not always accurately predict the broader Labor Department report, some investors said that the apparent clashing pictures of the job market were due to a jobs pickup in the last weeks of June.