Wall Street Tumbles as Job Losses, Bad Mortgages Pile Up

Updated from 12:15 p.m. EST

U.S. stocks climbed off their lows but were still trading in the red Friday afternoon, after the Labor Department announced that the economy lost more than half a million jobs in November, an even more dire decline than had been anticipated.

The Dow Jones Industrial Average was down 105 points to 8272, and the S&P 500 gave back 9.2 points to 836. The Nasdaq stumbled 9 points to 1437.

Before trading commenced, the government reported that the unemployment rate reached a 15-year high of 6.7% in November, up from 6.5% in October but slightly below the 6.8% analysts had expected. Nonfarm payrolls showed a loss of 533,000 jobs, a much greater decline than the drop of 335,000 forecast by economists.

The September and October job-loss figures were also worse than previously thought. The September number was revised to 403,000 from 284,000, and October job losses were up to 320,000, up from an initial reading of 240,000.

The average workweek declined slightly to 33.5 hours, and hourly earnings were up 0.4%, compared with a 0.3% increase in October.

"This is almost indescribably terrible," wrote Ian Shepherdson, chief U.S. economist for High Frequency Economics, in an email. He said that total job losses in the past six months have now reached 1.55 million, a figure that matches the entire recession of 2001.

On the other hand, Chris Johnson, CEO and chief investment strategist at Johnson Research, said that the market has already been pricing in a very weak unemployment number. "It's really hard to take the market by surprise." He said investors had largely already set themselves up for the dismal report, and he doesn't anticipate much more selling on this news.

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