NEW YORK - Stocks are moving lower early Friday after the U.S. government disappointed investors with news that hiring slowed down sharply last month.
The Labor Department reported that
only 74,000 jobs were added to payrolls in December, the fewest in three years
and far less than economists were expecting. The unemployment rate fell, but
mostly because many discouraged Americans stopped looking for work. The dollar
fell and bond prices rose as investors expected the Federal Reserve to keep
interest rates low for a while.
Major stock indexes opened slightly
higher but turned lower after the first half-hour of trading. As of 10:15 a.m.
ET the Dow Jones industrial average was down 43 points, or 0.3 percent,
at 16,400. The Standard & Poor's 500 index was down four points, or 0.2
percent, at 1,834 and the Nasdaq composite was down eight points, or 0.2
percent, at 4,147.
The Labor Department said the unemployment rate fell last month to 6.7 percent from 7 percent, but mostly
because more Americans stopped looking for jobs. The government counts people
as unemployed only if they are actively searching for work.
"Almost every other piece of data
we have gotten showed that the pace of economic growth was picking up. This
report might be an outlier," said Kate Warne, an investment strategist
with Edward Jones. "We need to see more evidence before concluding that
all the other indicators are wrong."
Bond prices rose, sending yields
lower. The yield on the 10-year Treasury note fell to 2.89 percent from 2.97
percent. Investors interpreted the slowdown in hiring last month as a signal
that the Fed won't move quickly to make more cuts to its bond-buying program.
Alcoa fell the most in the S&P
500. The stock dropped 76 cents, or 7 percent, to $9.93. The aluminum company
posted a $2.34 billion fourth-quarter loss late Thursday due to low aluminum
prices. Removing one-time charges, the company earned a profit, but that still
fell short of Wall Street expectations.
Target fell 38 cents, or 1 percent, to $62.97. The discount retailer said Friday that it now believes 70 million customers had their information stolen over the holiday season, nearly double what was previously thought. The company also cut its fourth quarter earnings outlook, saying the security breach caused customers to shop elsewhere during the holidays.