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Stocks decline after mixed unemployment report

January 10, 2009|Associated Press

NEW YORK — The first full week of 2009 didn't bring Wall Street any huge shocks, but it also didn't bring much for investors to be happy about.

A jump in unemployment sent stocks sharply lower Friday as investors feared that Americans won't soon deviate from their tightened budgets. The Dow Jones industrial average fell 143 points to end the week down nearly 5%, its worst week since November.

The Labor Department's much-anticipated report showed employers cut 524,000 jobs in December, a smaller decline than the loss of 550,000 jobs economists had forecast.

But the unemployment rate jumped to a 16-year high of 7.2% from 6.8% in November. Economists had expected a jobless rate of 7%.

The Dow fell 143.28 points, or 1.6%, to 8,599.18. The blue chips' 4.8% decline for the week was the biggest since the week ended Nov. 21.

Broader stock indicators also lost ground. The Standard & Poor's 500 index fell 19.38 points, or 2.1%, to 890.35, and the Nasdaq composite index fell 45.42 points, or 2.8%, to 1,571.59.

For the week, the S&P 500 slid 4.5%, and the Nasdaq lost 3.7%.

The Russell 2,000 index of smaller companies dropped 4.1% on Friday, putting it down 4.8% for the week.

Declining issues outnumbered advancers by more than 2 to 1 on the New York Stock Exchange.

Treasury bond yields fell along with stocks on the grim job data. The yield on the benchmark 10-year Treasury note fell to 2.40% from 2.44% late Thursday.

The dollar mostly rose against other major currencies, while gold prices fell.

Oil futures settled at $40.83 a barrel on the New York Mercantile Exchange, down 87 cents, after dipping as low as $39.38.

Shares of oil companies tumbled, bringing an S&P index of energy stocks down 3.1%.

Occidental Petroleum slumped 4.6%. Schlumberger fell 6.2% after announcing plans to cut about 5% of its workforce because of the decline in the price of crude. Oil is down from more than $147 a barrel in July.

Citigroup fell 5.7% after board member Robert Rubin, a former U.S. Treasury secretary, resigned as a senior advisor to the financial services giant. The company said he would remain on its board until his term expires in the spring. Rubin has drawn criticism for his role in the bank's recent problems that drove it to seek federal assistance.

Retailing stocks slumped on the unemployment report. Target dropped 5.7%, while Macy's sank 5.8%.

Overseas, key stock indexes fell 0.4% in Japan, 1.3% in Britain, 2% in Germany and 0.7% in France.

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