NEW YORK, Aug. 6 -- Stock market indicators fell to their low points for the year and bond prices rose on Friday after the government reported surprisingly tepid job growth in July, signaling that the economic recovery remains fragile and corporate profit growth could slow.
The Dow Jones industrial average of 30 blue-chip companies dropped 147.70 points, or 1.5 percent, to close at 9815.33. It was the lowest close for the Dow since Nov. 28.
A trader at the NYSE, at which decliners outnumbered advancers by 8 to 5.
(Henny Ray Abrams -- Reuters)
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Video: Washington Post staff writer Nell Henderson discusses the latest unemployment report.
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Bush Campaign: Gary Blank, economic adviser for the Bush-Cheney campaign, offered the GOP ticket's take on the latest economic data. (Aug. 6).
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Kerry Campaign: Jason Furman, economic adviser for the Kerry-Edwards campaign, gave the Democrats' take (Aug. 6).
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The Nasdaq composite index continued its steep decline, finishing down 44.74 points, or nearly 2.5 percent, at 1776.89. The Nasdaq is at its lowest point since Aug. 26 and is down 11.3 percent this year. The Dow is down 6.1 percent.
The Standard & Poor's 500-stock index, considered the broadest barometer of the overall market, finished at 1063.97 on Friday, down 16.73 points, or 1.6 percent. The S&P 500 is down 4.3 percent for the year.
The swoon on Wall Street began at the opening bell after the Labor Department reported that employers added just 32,000 workers to their payrolls in July, well short of expectations. Many economists say payrolls must increase by about 150,000 per month just to keep up with population growth.
Traders and money managers said fear is spreading that continued high oil prices and sluggish job growth could cut consumer spending and slow the economy enough to cut into what had been a rapid rise in corporate profits. Declining profits make stocks seem more expensive.
"You had a weak jobs number last month and a really weak jobs number this month, and consumers have just been toasted by higher oil prices," said Jonathan Golub, equity strategist at JPMorgan Fleming Asset Management in New York. "You have to ask, is the economy beginning to stall?"
Bonds rallied Friday as investors sought less volatile investments. The benchmark 10-year Treasury note rose $14.06 per $1,000 face value. Its yield, which moves in the opposite direction of price, dropped to 4.22 percent, the lowest level since April 13. Gold, also considered a safe investment, also rose on Friday, with the futures contract on the New York Mercantile Exchange closing up 1.9 percent, at $399.80 a troy ounce.
Oil prices, after setting a new high on Thursday, declined somewhat as fears about a disruption in flow from Russia eased and expectations that a slowing U.S. economy could dampen demand rose. Light crude for September delivery finished at $43.95 per barrel on the New York Mercantile Exchange, down 46 cents from Thursday's $44.41.
For the bond market, the weak jobs number raised questions about the pace at which the Federal Reserve will raise interest rates. Bond prices tend to fall in an environment of rising rates because investors believe new issues will come on the market at higher rates, making current bonds less attractive.
