Updated from 4:07 p.m. EDT
Stocks ended solidly in the red Friday as investors were reluctant to buy following the latest batch of data on the U.S. economy.
Dow Jones Industrial Average
fell almost 80 points, or 0.9%, to 9153, while the
shed 19 points, or 1.1%, to 1715. The
dropped 10 points, or 1%, to 980. For the week, the Dow lost 1.4%, the Nasdaq fell 0.9% and the S&P slid 1.8%.
Treasuries were lower as well, with the yield on the 10-year note at 4.47%.
Almost 1.4 billion shares were traded on the
New York Stock Exchange
, and 1.5 billion shares were traded on the Nasdaq. Decliners outpaced advancers by about a 2-to-1 margin.
Markets were dissatisfied with the latest economic indicators after the Labor Department said the economy lost 44,000 jobs in July, even though the unemployment rate fell to 6.2% from 6.4% the previous month.
Economists had expected the jobless rate to fall to 6.3% and nonfarm payrolls to rise by 10,000. The reason for the incongruent data is that the overall size of the job market shrank, with fewer workers seeking employment in the month amid a discouraging job market.
"Investors are being a bit overzealous. It takes time for the snowball in the labor market to change," said Daniel Morgan, fund manager at Noble Financial.
Morgan said that after the 1991 Gulf War, the unemployment rate took a year and a half to follow the improvement in the economy, hovering at around 7% before starting to decline.
There was also some disappointment in the Institute for Supply Management's July report. Its manufacturing index rose to 51.8 from 49.8 the previous month, slightly below expectations of a 52 reading.
Meanwhile, personal income rose an expected 0.3% in June, unchanged from the prior month. June personal spending also climbed 0.3%, a slightly lower pace than the 0.4% economists had forecast. Spending had grown 0.4% in May, revised from a 0.1% increase.
Separately, the University of Michigan said consumer sentiment ticked up in July to 90.9 from 90.3, while economists had expected a 90.5 figure. Construction spending was unchanged in June after having fallen 0.5% the previous month. That was below estimates of a 0.4% increase.
Auto stocks were lower after Detroit's Big Three said their results dropped in July from the same month a year ago, with double-digit declines in car sales.
Industrywide sales in the U.S. fell to an adjusted annual rate of 16.9 million vehicles, from a year-ago record of 18.1 million. Shares of
slipped 3 cents, or 0.1%, to $37.40.
shed 16 cents, or 1.5%, to $10.90, and
lost 34 cents, or 1%, to $35.39.
Also pressuring the Dow was
Johnson & Johnson
, which fell $1.37, or 2.7%, to $50.42 after Merrill Lynch downgraded the stock to neutral from buy on concerns about competition in the market for stents.
In earnings news,
reported an increase in its quarterly profit. The oil company also said it will sell about $1 billion to $2 billion in assets per year for the next few years. Shares slipped 92 cents, or 1.3%, to $71.19.
posted a jump in earnings as a slump in theme-park visits was offset by stronger returns from films and TV networks. Shares gained 72 cents, or 3.3%, to $22.64.
reported a second-quarter loss, compared with a profit the previous year, because of higher medical costs and charges. Shares ended $1.18 lower, or 2.5%, at $45.60.
So far, 80% of the companies in the S&P 500 have reported earnings, with some 65% surpassing analysts' estimates. This has prompted Wall Street to increase its projections for an average profit rise of 14% and 22% for the third and fourth quarters, respectively.
From the corporate front,
, parent of cigarette maker Philip Morris, rose 27 cents, or 0.7%, to $40.28 after a court decided not to require that the company pay damages to a former smoker.
Computer hardware and software maker
fell 27 cents, or 0.3%, to $80.98 after the company's pension plan was ruled discriminatory by a federal judge, who said it was more attractive to younger workers.
climbed 81 cents, or 3.8%, to $22.07 after rival
(formerly WorldCom), which is in the process of emerging from bankruptcy protection, was suspended from receiving new federal contracts because of ethics concerns. The government decision follows allegations by competitors that MCI illegally routed phone calls to avoid paying connection fees.
reported a 9% rise in same-store sales in July and forecast that the number will grow at or above its 3% to 7% range for the rest of the fiscal year. Starbucks shares dropped 22 cents, or 0.8%, to $27.11.
Overseas markets were mixed, with London's FTSE 100 down 58 points, or 1.4% to 4098 and Germany's Xetra DAX losing 66 points, or 1.9%, to 3421. In Asia, Japan's Nikkei closed up 0.5% at 9611, while Hong Kong's Hang Seng gained 1.1% to 10,248.
Crude oil prices for future delivery rose in London. The dollar was weaker against the yen but stronger against the euro.
On Thursday, the Dow Jones Industrial Average closed up 33.75 points, or 0.4%, at 9233.8, while the Nasdaq finished higher by 14 points, or 0.8%, at 1735. The S&P 500 rose 2.8 points, or 0.3%, to 990.3.