Stocks extended their losses Friday as the Labor Department’s unemployment report offered fresh evidence that the economic recovery is stumbling, capping a tumultuous week on Wall Street.
The Dow Jones industrial average fell 0.79 percent to 12,151.26, closing down for the fifth consecutive week. The S&P 500-stock index fell 0.97 percent, to 1,300.16, while the tech-heavy Nasdaq composite was off 1.46 percent, to 2,732.78.
All three indexes are down about 2.3 percent for the week.
The holiday-shortened trading week began Tuesday with the Dow Jones ticking up on speculation that European nations were preparing to deliver more financial aid for debt-ridden Greece, which faces the prospect of a default that could shake global markets. A day later, the Dow plunged more than 280 points, its largest one-day retreat in almost a year, after bad news about industrial production and job creation.
The losses Friday reflected investors’ disappointment in the jobs report, which showed that the U.S. unemployment rate rose to 9.1 percent in May from 9 percent in April. Analysts had expected that about 180,000 jobs were created last month, but the report showed that only 54,000 were added, a pace that isn’t enough to propel the recovery.
“You brought back the idea of double-dip. You brought back the idea that without jobs this is not a sustainable recovery,” said Jim Paulsen, chief investment strategist for Wells Capital Management.
The unemployment data comes on the heels of other discouraging economic reports, which showed falling home prices, sluggish growth in the manufacturing industry and weak expansion of private-sector hiring.
The series of weak numbers overshadowed an upbeat report Friday from the Institute for Supply Management that indicated growth in the U.S. service sector. The ISM’s non-manufacturing index registered 54.6 percent in May, up from 52.8 percent the previous month. Any figure above 50 represents growth.
“Most of the weakness that the markets are worried about is in the manufacturing sector,” said Jim McDonald, chief investment strategist for Northern Trust.
Earlier this year, the manufacturing industry had been helping to lead the economy out of recession, a source of optimism for investors.
Some analysts said the factors dragging stocks down are not cause for long-term concern.
“We are in the midst of an economic soft patch right now, largely for a series of temporary reasons,” said Phil Orlando, chief equity strategist at Federated Investors. He said they included high prices for oil and other commodities, extreme weather and a supply chain disruption caused by the earthquake and tsunami in Japan. In the aftermath of the disaster, U.S. production in the auto industry slowed.
Alcoa and DuPont led the Dow downward Friday, losing 1.73 percent and 1.72 percent, respectively. A bright spot, however, was Wal-Mart, whose stocks rose 0.21 percent after it announced at an annual shareholder event that it would implement a $15 billion share buy-back program. The retailer also said it planned to launch smaller outlets that would help it gain a foothold in urban markets.
The dollar dropped against the yen and the euro.
Oil prices, which had shot up to almost $114 a barrel in April as a result of concerns over unrest in Libya, finished the week at just over $100 per barrel.
Yields on Treasury bonds hovered around 3 percent as demand increased for the relatively safe investment.
“It’s been a week where we’ve seen a modest flight to safety,” said Fred Dickson, chief investment strategist for D.A. Davidson.