By STEVE ROTHWELL, Associated Press
NEW YORK (AP) — Stocks fell in early trading after the U.S. economy added fewer jobs than forecast in July, blunting optimism that the economy is poised to pick up strength in the second half of the year.
The U.S. economy added 162,000 jobs in July, pushing the unemployment rate to 4½-year low of 7.4 percent, the Labor Department said Friday. The number of jobs created was the lowest since March and well below the 183,000 that economists polled by FactSet were expecting.
"The jobs number was very uninspired," said Ron Florance, managing director of investment strategy for Wells Fargo Private Bank. "The labor market, as indicated by the jobs report today, is not strong enough to support a robust economy."
The Standard & Poor's 500 index dropped four points, or 0.3 percent, to 1,702 as of 9:56 a.m. Eastern Daylight Time. The Dow Jones industrial average fell 51 points, or 0.3 percent, to 15,576. The Nasdaq composite fell 6 points, or 0.2 percent, to 3,669.
Energy stocks fell more than the rest of the market after Chevron became the latest big energy company to disappoint investors with lower earnings. Chevron's profit fell 26 percent to $5.4 billion due to lower oil prices and maintenance work at refineries. The stock fell $3.03, or 2.4 percent, to $123.40, the most of the 30 stocks in the Dow.
Among other companies reporting earnings, LinkedIn surged $19, or 18 percent, to $232 after the professional networking company's results topped analysts' estimates. LinkedIn had its biggest quarterly membership gain since going public in May 2011.
Investors are trying to anticipate when the Federal Reserve will start easing back on its economic stimulus. The central bank is buying $85 billion of bonds a month to keep long-term interest rates low and encourage borrowing. That stimulus has boosted stock markets to record levels and pushed the Standard & Poor's index past 1,700 for the first time Thursday.
Government bonds rose after the tepid jobs report. The yield on the 10-year Treasury note, which falls when the note's price increases, fell to 2.64 percent from 2.71 percent Thursday. Bonds were regaining some lost ground after a sell-off Thursday that was prompted by a collection of reports suggesting the economy is improving.
In commodities trading, the price of oil fell $1.09, or 1 percent, to $106.81 a barrel. Gold was down $1.80 to $1,309 an ounce.
The dollar fell against the euro and the Japanese yen.
Among other stocks making big moves:
— Viacom surged $4.82, or 6.5 percent, to $79.21 after the media company said its income rose 20 percent in the latest quarter, boosted by affiliate fee revenue its cable TV channels and higher advertising revenue. Viacom also increased its stock buyback program to $20 billion from $10 billion.
— American International Group, the insurer that was bailed out by the government during the financial crisis, rose $1.87, or 4 percent, to $48.95 after the company said late Thursday that its profit grew 17 percent in the second quarter. The insurer benefited from higher premiums, prices and income from investments.
— Weight Watchers International plunged $9.16, or 20 percent, to $37.87 after the company reported late Thursday that its second-quarter net income fell 16 percent as the company booked costs related to the early extinguishment of debt. he company also named a new CEO and said recruitment trends are weak.
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