Stocks decline 1% after weak June unemployment report

NEW YORK -- Stock indexes fell 1% after June’s weak unemployment report reminded investors of the country’s tepid economy.

The Dow Jones industrial average dropped 147 points, or 1.1%, to 12,750 shortly after the opening bell.

The broader Standard & Poor’s 500 lost 14 points, or 1%, to 1,354, in early trading. The Nasdaq was down 37 points, or 1.3%, to 2,939.

Central banks in Europe and Asia have recently taken action to lower interest rates as global growth has slumped. But the Eurozone’s financial problems remain far from solved, and the June U.S. jobs report was another reminder of domestic sluggishness.

The federal government reported Friday that U.S. companies added only 80,000 jobs to payrolls in June, too few to alleviate the country’s persistent high joblessness. The unemployment rate remained at 8.2%.

J.J. Kinahan, chief derivatives strategist for TD Ameritrade, called the jobs report “disappointing” but “not absolutely devastating.”

An ADP report Thursday predicting 176,000 job gains in June had raised investors’ expectations, Kinahan said.

Economic data have been giving Wall Street a conflicting picture, he said. The economy may be growing without managers needing to hire, but in the long run that doesn’t bode well for an economy that’s so heavily dependent on consumer spending.

“We’re going to have to start employing people again or the economy is going to slow significantly,” Kinahan said. “If people aren’t getting jobs, confidence starts to wane. And when confidence starts to wane, people stop spending.”

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