Stocks Drop 1% as Markets Eye a Weak Recovery

Stocks were losing roughly 1% as a disappointing June jobs report had investors feeling less confident in the economic recovery.

The Dow Jones Industrial Average was down by 122 points, or 1%, at 12,598. The S&P 500 was lower by 16 points, or 1.2%, at 1338, and the Nasdaq was off by 32 points, 1.1%, at 2840.

The U.S. economy only added 18,000 jobs in June after gaining 25,000 jobs in May, according to the Labor Department's report, which was well below the increase of 80,000 that the market had been expecting. The private sector added 57,000 payrolls, missing projected additions of 110,000, according to Briefing.com. The unemployment rate was also disappointing, rising to 9.2%, even though economists had expected it to hold steady at 9.1%.

Average hourly earnings were unchanged in June and the average workweek dipped to 34.3 hours, from 34.4 hours, previously. Manufacturing industries saw a 0.3% decline in weekly hours, suggesting minimal growth in industrial production during the month.


The market took June's lower-than-expected job growth particularly hard after data from Automatic Data Processing on Thursday showed that the private sector added 157,000 payrolls in June -- more than double what economists had been expecting -- leading some market watchers to increase their expectations ahead of Friday's report.

The disappointing news curbed investors' risk appetites, triggering a flight to quality.

The benchmark 10-year Treasury rose 1 2/32, diluting the yield to 3.016%.

                                           Source: The Street