Market Fizzles Before Fourth

Updated with Treasuries, stock and commodity prices

Oil barreled more than $2 lower and the major indices in New York closed more than 2.5% lower Thursday after a disappointing jobs report spoiled the end of the holiday-shortened week.

The Dow Jones Industrial Average finished down 223.32 points, or 2.6%, at 8280.74, while the S&P 500 lost 26.91 points, or 2.9%, to 896.42. The Nasdaq Composite declined 49.20 points, or 2.7%, to 1796.52.

For the week, the Dow lost 1.8%, the S&P 500 gave up 2.4%, and the Nasdaq ended down 2.3%.

All 30 Dow stocks were in negative territory on Thursday. The biggest percent losers on the Dow included industrials Alcoa ( AA), Caterpillar ( CAT), which lost 4.7% and 4.4%, respectively, and JPMorgan Chase ( JPM), down 4.4%.

Integrated oil stocks also fell as crude oil futures slumped $2.51 to $66.80 a barrel, a day after the Energy Department's Energy Information Administration reported that gasoline and distillate inventories increased more than expected last week. PetroChina ( PTR) and Chesapeake Energy ( CHK) gave up 4.3% and 5%, respectively.

Stocks sank lower across sectors after the U.S. government reported that 467,000 jobs were lost in June -- about 100,000 more than expected. That's up from a downwardly revised 322,000 job losses in May. The number of people unemployed for 27 weeks or more increased by 433,000 to 4.4 million, while the overall unemployment rate rose to 9.5% from 9.4%.

Since the start of the recession in December 2007, the number of unemployed persons has increased by 7.2 million, and the unemployment rate has risen by 4.6 percentage points, according to the report.

Those data were all the more unnerving because they followed disappointing consumer confidence data earlier in the week and also prior data that indicated consumers were increasing saving, says Ryan Detrick, senior technical strategist at Schaeffer's Investment Research.

"You have consumers that are losing their jobs, not very confident and they're hoarding their money, and as we all know, you need consumers to spend to get the economy going," says Detrick. "So when you add it all together some of that recent action we've seen is definitely negative and the stock market is selling off." (Click below to listen to my entire conversation with Detrick.)

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Market Q&A

Separately, the Department of Labor said there were 614,000 new jobless claims last week, relatively in line with expectations, and down from an upwardly revised 630,000 the week prior.

 Market Roundup

One stock doing well, Irish drugmaker Elan ( ELN) rose 8.6% on news that Johnson & Johnson ( JNJ) is spending $1 billion to acquire a minority stake in the company and take over development of its Alzheimer's disease drugs.

In other corporate news, U.S. automaker General Motors ( GMGMQ), which is currently operating under bankruptcy protection, may be receiving a bid from China's Beijing Automotive for its Opel unit within the next few days, the Journal reported, although Canada's

Magna International ( MGA) is still seen as the front-runner to buy the unit.

Meanwhile, automotive parts supplier Lear ( LEA) said it is preparing to file for bankruptcy protection and has lined up financing to fund its operations while under court protection.

Stocks overseas were mostly lower. In Europe, London's FTSE 100 and the DAx in Frankfurt fell 2.3% and 3.4%, respectively. In Asia, the Nikkei in Japan and the Hang Seng in Hong Kong closed lower by 0.6% and 1.1%, respectively.

The dollar was weaker against the yen, but stronger vs. the pound and euro, while gold lost $8.50 to $929.20 an ounce.

Longer-dated Treasuries were rising. The 10-year was adding 10/32 to yield 3.5%, while the 30-year was up 4/32, yielding 4.32%.

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