Weak jobs report sends Dow to seventh straight day of losses
NEW YORK -- U.S. stocks slid Friday after a disappointing jobs report added to investors' concerns that the economic recovery is losing steam, ending a week of steep losses on Wall Street.
The Dow Jones industrial average dropped for a seventh straight day after the government said private employers added only 83,000 jobs last month, fewer than the 112,000 analysts had forecast. The Dow hasn't fallen for that many days in a row since an eight-day losing streak at the height of the financial crisis in October 2008.
Since late April, pessimism has been growing about the health of the economy. The Dow lost 10 percent for the second quarter, which ended Wednesday, while the Standard & Poor's 500-stock index lost 11.9 percent.
"Clearly, there is a loss of momentum," said Bob Baur, chief global economist at Principal Global Investors, referring to the recovery. He said the slide in stocks could do as much as anything to hurt the economy by eroding confidence. Still, he said a double-dip is unlikely in part because incomes are ticking higher and consumers are slowly adding to spending. "We just don't see the typical things that start another recession," Baur said.
On Friday, light trading ahead of the long Independence Day weekend brought some choppy moves, particularly in the final hour. The Dow was essentially flat in the last five minutes before sliding just ahead of the close. The blue-chip index ended the day down 46.05, or 0.5 percent, to close at 9,686.48.
Broader market indicators also declined, with the S&P 500 slipping 4.79, or 0.5 percent, to 1022.58 and the tech-heavy Nasdaq composite index falling 9.57, or 0.5 percent, to 2091.79.
For the week, the Dow dropped 4.5 percent. The S&P 500 index lost 5 percent, while the Nasdaq dropped 5.9 percent.
Investors are focused on business hiring because that makes up the bulk of the country's work force. Also, overall jobs numbers have been skewed in recent months by the hiring of temporary census workers. Businesses aren't adding to payrolls as quickly as most investors would like.
The small businessman refuses to play here," said Linda Duessel, equity market strategist at Federated Investors in Pittsburgh. She said business leaders don't yet have the confidence to hire and are instead relying on temporary workers. The enduring jobs problems are raising concerns that the economy will begin sliding again. Many economists say that's unlikely but still a worry.
"We're going to need, as a market, something to make us believe that the double-dip scenario is wrong," Duessel said. "A soft patch is normal." She said upcoming earnings reports for the second quarter could boost sentiment if companies also give upbeat forecasts.
Daniel Penrod, senior industry analyst for the California Credit Union League, said the handoff from government stimulus to private hiring will work eventually but the question is when. Until there is more certainty about the direction of the economy some businesses are going to put off hiring.
"I don't see business really taking huge risks right now to build when they don't think people are going to be walking through the door," Penrod said.
The coming week could bring more insight into the economy if companies begin to drop hints about their earnings and forecasts. U.S. markets are closed Monday in observance of Independence Day. Tuesday brings a report on services businesses, which make up the biggest chunk of the economy.
-- Associated Press