Stocks Derailed by GM, Factory Data - TheStreet

Updated from 2:46 p.m. EDT

Stocks in New York stumbled to a lower close Friday as the monthly jobs report, though better than expected, revealed continuing weakness in the labor market and suggested more sluggish times ahead for the U.S. economy.

The

Dow Jones Industrial Average

lost 51.70 points, or 0.5%, to 11,326.32, and the

S&P 500

was off 7.07 points, or 0.6%, at 1260.31. The

Nasdaq

was lower by 14.59 points, or 0.6%, to 2310.96.

For the week, the averages were essentially flat. The Dow lost 45 points, the S&P tacked on 3 points, and the Nasdaq edged up less than a point.

General Motors

(GM) - Get Report

was one of the main problems for the Dow, falling 7.6% after posting a massive $15.5 billion second-quarter loss, including charges and writedowns of more than $9 billion.

Another drag on sentiment was the manufacturing report from the Institute for Supply Management. The index registered a neutral reading of 50, meaning the factory sector neither contracted nor expanded last month, and represented a downtick from June's number.

During the first minutes of trading, investors initially reacted favorably to the Labor Department's employment report, which showed that U.S. nonfarm firms cut 51,000 jobs in July. Though that was the seventh straight drop, fewer workers were sidelined than most analysts expected.

Additionally, the data for May and June were revised higher to add back a combined 26,000 jobs. A Bloomberg survey had a consensus estimate for a loss of about 75,000 employees last month. Meanwhile, the unemployment rate rose to 5.7%, a bit higher than the 5.6% forecast.

However, the early uptick wouldn't hold, and the major indices traded in the red for much of the day.

Back in stocks,

Elan

(ELN)

and

Biogen Idec

(BIIB) - Get Report

were taken apart, plunging 50% and 28%, respectively, on news that two patients taking their multiple sclerosis drug Tysabri had

developed an often deadly brain infection

.

Along with GM, several other companies were reporting their numbers, including fellow Dow component

Chevron

(CVX) - Get Report

, which fell short of analysts' estimates. A day ago,

Exxon Mobil

(XOM) - Get Report

missed expectations, despite posting the highest quarterly earnings in U.S. history.

NYSE Euronext

(NYX)

also came in light on the bottom line, but exceeded Wall Street's revenue target.

Nortel

(NT)

surpassed the consensus projection on the top line.

Sun Microsystems

(JAVA)

reported quarterly revenue that was in line with forecasts and set plans for an additional $1 billion buyback, while

KBR

(KBR) - Get Report

and

Clorox

(CLX) - Get Report

had stronger-than-expected profits.

Outside of earnings, automakers reported another drop in monthly sales. At

Ford

(F) - Get Report

, total sales were down 14.9%. GM had a 26% decline.

This article was written by a staff member of TheStreet.com.