U.S. Stocks Open Lower on Back of Weak Jobs Data
07/06/2012| 09:58am US/Eastern
By Jonathan Cheng
U.S. stocks opened lower after U.S. nonfarm payrolls grew by just 80,000 new jobs in June, falling short of expectations and suggesting further weakness in the economy.
The Dow Jones Industrial Average lost 123 points, or 1%, to 12774. The Standard & Poor's 500-stock index gave up 12 points, or 0.9%, to 1356, while the Nasdaq Composite eased 22 points, or 0.7%, to 2954.
Leading the fall were stocks sensitive to global growth. Caterpillar and Alcoa led the declines among Dow components, while materials and energy stocks were among the worst-performing sectors on the S&P 500.
The moves came after the Labor Department's monthly employment report showed nonfarm payroll growth improved by just 80,000 in June from an upwardly revised reading of 77,000 in May. That fell short of the 100,000 jobs that economists had expected. The unemployment rate stood pat at 8.2%, in line with expectations.
The soft reading comes on the heels of similarly disappointing reports on the U.S. manufacturing and services sectors, and caught some economists off guard. On Thursday, many of them had nudged their predictions for Friday's report modestly higher, following a surprisingly strong report on private-sector payrolls.
Immediately following the report, crude-oil futures extended losses, falling 2.9% to below $85 a barrel. Gold futures declined 1.3% to below $1,600 an ounce. The U.S. dollar moved higher against the euro, which traded at $1.2334, but lost ground against the yen. The benchmark 10-year Treasury yield declined to 1.56%.
Write to Jonathan Cheng at Jonathan.Cheng@wsj.com