Stocks Sag Under Jobless Numbers

Updated from 9:44 a.m. EDT

Stocks in New York were sagging Friday as the government's read on unemployment jumped for August, renewing investor concerns about a U.S. recession.

The Dow Jones Industrial Average tumbled 109 points to 11,107, and the S&P 500 gave back 11 points to 1226. The Nasdaq was down 21 points at 2238.

Before trading got under way, the Labor Department reported that the August unemployment rate reached 6.1%, its highest level since September 2003. Economists had expected the rate to hold at July's level of 5.7%. Nonfarm payrolls were down by 84,000, a bigger loss than 75,000 in July. The average workweek remained unchanged at 33.6 hours, and the average hourly wage rose 0.4% from a month ago to $18.14.

"Terrible," said Jack Ablin, chief investment officer at Harris Private Bank, of the jobs number. "I would say that it really kind of knocks the legs out of any thought of recovery here." He said the unemployment number further complicates an already difficult situation brought about by the housing crisis and credit crunch.

Ablin said that the the economic stimulus package has helped the U.S. avoid the definition of a recession. "But ask most people [and] I think they would agree that we are experiencing recession even if the numbers don't show it," he said. "And [the jobs number] would confirm my suspicion."

Some of the weak data was already priced in to stocks, which is why the market didn't fall as much as it could have following the unemployment release, said Ablin.