U.S. Stocks Tilt Lower At The Opening After Weak Jobs Growth

NEW YORK (MarketWatch) -- U.S. stocks opened lower Friday, after the latest employment report showed weaker-than-expected jobs growth and higher unemployment last month.

"This is not a positive catalyst for the market," said Art Hogan, chief market strategist at Jefferies & Co. "I think people are going to be a little shocked that the unemployment rate inched higher last month."

The Dow Jones Industrial Average was down 7.2 points at 13,456.1.

The S&P 500 and the Nasdaq 100 were 0.47 points lower at 1,471.73 and off 3.99 points at 2,572.32.

On Thursday stocks finished higher, after a hectic session that saw the major averages change direction numerous times. Investors this week have alternated between positive sentiment linked to strong corporate and economic fundamentals and worries about subprime lending and a nearly dry pipeline of credit market deals.

At Friday's opening, the July jobs report will be uppermost in investors' minds. The Labor Department reported that nonfarm payrolls grew by a lower-than-expected 92,000 in July, the lowest level since February.

In addition, the unemployment rate rose to 4.6%, the highest since January, Economists were expecting payroll growth of about 133,000, according to a survey conducted by MarketWatch. The jobless rate was expected to remain at 4.5%.

At noon Eastern, the Institute for Supply Management's survey of the services sector for last month is scheduled for release.

Stocks on the move

Shares of Procter & Gamble Co. rose 0.6% to $63.70 in premarket electronic trade. The company reported a 19% gain in quarterly profit due to some new products and also said it will buy back up to $30 billion of its stock.

Toyota Motor Corp. reported a stronger-than-forecast profit on the back of a weak yen and better product mix. That stock rose 2.9% to $122 before the bell.

Credit-sensitive stocks

Countrywide Financial tried to soothe liquidity concerns by announcing that it has access to nearly $50 billion in short-term funding as a cushion. The stock was off 1.2% at $26.44 before the opening.

American Home Mortgage Investment Corp. , a smaller rival, has been hit by bankruptcy concerns. The company said it will layoff more than 6,000 workers and stop taking mortgage applications. In premarket trade it was 44% lower at 81 cents after a near wipeout of its market capitalization earlier in the week.

Other markets

Treasurys shot higher after the weaker-than-expected jobs report as these safe-haven assets generally benefit from signs of economic weakness. The benchmark 10-year Treasury note last was 5/32 higher at 98-2/32 with a yield of 4.7455%.

The jobs data weakened the dollar. The euro was last up 0.1% at $1.3717, while the dollar was down 0.2% at 118.89 yen.

Gold futures edged higher after the data. Gold for December delivery gained $2.30 at $678.90 an ounce on the New York Mercantile Exchange.

Crude futures were higher also, with the front-month contract up 13 cents at $76.99 a barrel.

By Leslie Wines