Dour Job Report Sends Stocks Lower

Dow Jones Closed at Lowest Level in Six Weeks, Investors Move to Bonds

(AP)  A dour report on job losses in June sent stocks sharply lower Thursday.

Major stock indexes fell more than 2.6 percent after the government said the U.S. unemployment rate hit a 26-year high. The Dow Jones industrials closed at their lowest level in six weeks.

Trading on the New York Stock Exchange was extended until 4:15 p.m. Eastern time in order to execute customer orders impacted by system irregularities, an NYSE spokeswoman said.

As investors sold off stocks amid fresh concerns about the economy, they moved into the safety of bonds, pushing Treasury yields lower.

Recession-weary employers in the U.S. slashed 467,000 jobs in June, the Labor Department reported, far worse than the 363,000 that economists expected and a grim signal that the path to recovery will be bumpy. The jobless rate rose to 9.5 percent from 9.4 percent in May.

The report - one of the most closely watched economic indicators

disappointed investors who had become encouraged by positive signs recently that key areas of the economy including housing and manufacturing were showing modest signs of improvement.

The stock market rallied furiously this spring off of 12-year lows beginning in early March on hopes for a recovery, but the upward momentum stalled in mid-June as doubts began to emerge about whether the economy had really found a bottom. The June jobs report was the latest blow to the market's confidence.

"There's more and more evidence mounting against this rally continuing," said Doug De Groote, a managing director at United Wealth Management. Consumers are likely to lead the nation out of the ongoing recession, but that won't happen if more people are losing their jobs, he said.

Shares of consumer products companies were among the hardest hit Thursday.

The Dow Jones industrials lost 223.32, or 2.6 percent, 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 fell 26.91, or 2.9 percent, to 896.42 and the Nasdaq composite index fell 49.20, or 2.7 percent, to 1,796.52.

The market's recent rally pushed stock prices back to reasonable levels after they were severely undervalued, said Tim Courtney, chief investment officer at Burns Advisory Group.

With stocks prices back in more normal pricing ranges, "they look less cheap, so bad news like this really starts to sway prices," Courtney said of the unemployment report.

Overseas markets also fell after a report showed unemployment in Europe rose to a 10-year high in May.

"This is part of the market recovery," said Roy Williams, CEO of Prestige Wealth Management. "You're going to get bad news." Williams predicted the unemployment rate is likely to reach 11 percent.

As stock prices fell across the board, other signs of investor unease emerged. Treasury prices rose, driving the yield on the 10-year note down to 3.50 percent from 3.54 percent late Wednesday.

Meanwhile a gauge of volatility in the stock market, the Chicago Board Options Exchange Volatility Index, or VIX, rose 1.66, or 6.3 percent, to 27.88 Thursday afternoon.

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

Volume came to a relatively low 733.6 million shares ahead of the holiday weekend, compared with 951.1 million shares traded at the same point Wednesday. Markets will be closed Friday in observance of the Independence Day holiday.

Light volume can lead to more volatile swings in trading.

An upbeat report about May factory orders was not enough to boost traders' confidence amid the weak employment numbers. The Commerce Department said total orders rose 1.2 percent in May, better than the 0.8 percent increase that economists had expected.

Markets kicked off the third quarter on Wednesday with gains after getting some reassuring data on manufacturing and housing. Traders were encouraged by a report showing more stable manufacturing activity and another indicating the fourth straight monthly rise in pending home sales.

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

The Russell 2000 index of smaller companies fell 19.61, or 3.8 percent, to 497.85.

Overseas, Japan's Nikkei stock average fell 0.6 percent. Britain's FTSE 100 fell 2.5 percent, Germany's DAX index declined 3.8 percent, and France's CAC-40 fell 3.1 percent.

[whitemale08]

President Obama just told the AP that he wants another 'engine' or Greenspan bubble to boost the economy.

He said that the carbon-swaps-tax would be that 'engine' or the new 'British-bubble South Sea Company', that helped wipe out most of Europe and plunged it into a Dark Age for generations.

Folks, I try to warn you with everything I got to listen to Lyndon Larouche and help stop the bailouts of Goldman Sucks and JP Morgan.

Goldman Sucks, JP Morgan, and British Banks like Barclay's Capital needs the bailout money to start this new 'South Sea' bubble which was a complete fraud, like the Dutch 'Tulip' bubble.

The difference about this carbon-swap-tax 'bubble' is that the derivatives to be used in it will kill and reduce the human population by 2/3rds.

Once the American sucker makes the mistake and transfers what's left of their 401(k)s and pensions over to these mega-hedge funds like Black Rock and the Carlyle group for 'green stocks', it's over.

Because then it will be a 'systemic risk' to back out of the 'carbon-swap-tax' bubble.

Please connect the dots folks, don't be a herd of sheep and fall for this Wall Street/City of London scam.

Even Mitt Romney said: "...we need to do something about CLIMATE CHANGE", which makes him another corporate puppet for BIG FAILED BANKS.

[sjc_1]

There are lots of ways that the Labor and Commerce Departments can help connect up production with consumption in business to business.

A fastener company that is laying off people because its customers are reducing production can find new applications for its products, but lacks the research and marketing resources to do it. With todays computers, networks and databases, it should be easy to connect supply and demand more effectively.

[oftencensord]

Does anyone else find it strange that the stock markets have been unusually flat for so long?

And why does most of the movement happen in the first few minutes of opening, only to be stifled in the first hour?

Is it possible there is a government entity buying and selling to artificially balance the normal swings of the market?

Something seems wrong / different....

[thusspokezara]

The best way to defeat Obama is to save our money. Americans, save America by saving.

[tautomer]

It's actually kind of funny watching Obama and his friends trying to talk the economy up. This is what happens when you base your actions on "HOPE" instead of wisdom, experience and integrity.

Bush was bad...very bad, which is why we couldn't afford this clown as a followup. Out of the pot and into the FIRE!!!

Keep talking Barry, I'm sure the people for whom this is a disaster, instead of a mere inconvenience are relived that you're "CONCERNED".

[tautomer]

Socialism has never been good for a national economy. Ever since Obama appeared as a viable candidate the economy has suffered. First in proportion to the certainty that he would be elected, then the collapse as he was elected.

Fortunately those who had the foresight to stay in cash during this Socialist upheaval will be in a good position to aquire assets at bargain basement prices.
By killing the economny Obama has also crippled his tax revenues, the very revenue stream he was hoping to plunder.

[thusspokezara]

Confidence. We need confidence. But what confidence is there to be had with the Golden Calf, Biden, Pelosi, Reid, Barney Frank, Williams, Rice, Hillary, Knight, Conyers, Emmanuel, Burris, Durbin, Johnson, et al in charge? The only thing I am confident of is more taxes, more regulation, more political correctness, less freedom, fewer choices.