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Stocks fall after poor jobs report

July 03, 2009|Associated Press

NEW YORK — Major stock indexes tumbled more than 2.6% on Thursday, with the Dow Jones industrials falling to a six-week low, on news that employers last month cut far more jobs than expected.

The data released by Labor Department, including a 26-year high in the unemployment rate, delivered the latest blow to the stock market's already waning confidence.

An upbeat report on May factory orders failed to offset the weak job numbers. The Commerce Department said orders rose 1.2% in May, better than the 0.8% increase that economists had expected.

Investor optimism has been shaken in recent weeks by a barrage of mixed economic reports, making for erratic trading.

The Dow Jones industrials fell 223.32 points, or 2.6%, to 8,280.74, the lowest close since May 22. It was the average's worst day since April 20.

The Standard & Poor's 500 index sank 26.91 points, or 2.9%, to 896.42, and the Nasdaq composite index dropped 49.20, or 2.7%, to 1,796.52.

The Russell 2,000 index of smaller companies slumped 3.9%.

Declining issues outnumbered advancers by about 5 to 1 on the New York Stock Exchange.

Trading on the Big Board was extended 15 minutes beyond the regular closing time to allow for the execution of orders affected by system irregularities, the exchange said.

Volume was predictably light going into a three-day weekend. U.S. markets will be closed today in observance of the Fourth of July.

For the four-day week, the Dow finished down 1.9%, the S&P 500 lost 2.5%, the Nasdaq fell 2.3% and the Russell 2,000 was off 3.1%.

It was a volatile week. Stocks rose Monday, then erased nearly all their gains the following day after a report showing an unexpected drop in consumer confidence.

On Wednesday the market bounced back after getting some reassuring data on manufacturing and housing, only to tumble again Thursday on the disappointing jobs report.

"There's not a lot of conviction on either side," said Jill Evans, co-manager of Alpine Dynamic Dividend fund.

Overseas markets also fell Thursday after a report showed unemployment in Europe rose to a 10-year high in May. Key stock indexes slid 2.5% in Britain, 3.8% in Germany and 3.1% in France.

Yields on U.S. government securities fell as some investors sought the perceived safety of Treasuries. The yield on the 10-year note dropped to 3.49% from 3.54% late Wednesday.

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