Stocks stumble after unemployment rises to 9.8 pct

NEW YORK (AP) -- An unexpected rise in the U.S. unemployment rate pushed most stocks down Friday as investors moved money into safer assets.
The unemployment rate climbed to a seven-month high in November as employers added just 39,000 jobs. Economists had expected a gain of 145,000.
The unemployment rate climbed to 9.8 percent from 9.6 percent.
Investors had hoped that a strong jobs report would help extend a two-day stock rally. Expectations of job growth rose Wednesday after a report showed that small businesses were hiring at the fastest pace in three years. That and strong reports Thursday on retail spending and home sales pushed the Dow Jones industrial average up 356 points in two days.

"In order for stocks to push through their highs for this year, we're going to need a positive number on the jobs front," Todd Salamone, the director of research at Schaeffer's Investment Research, had said before the report.
The Dow Jones industrial average was down 16.04, or 0.1 percent, to 11,346.37 in afternoon trading.
Of the 30 stocks that make up the Dow, only 9 rose. DuPont led the index with a 1 percent gain. JPMorgan Chase & Co. was the index's laggard with a 1 percent loss.
The broader Standard and Poor's 500 index fell 2, or 0.2 percent, to 1,219.69. The Nasdaq composite index rose 4, or 0.1 percent, to 2,583.01.
Bond prices rose after the jobs report as traders bought safer assets. The yield on the 10-year Treasury fell to 2.98 percent from 3.00 percent late Thursday. That yield helps set interest rates on many loans including home mortgages.
The weak jobs report served as a reminder that the recovery is proceeding fitfully. The recession that started in December 2007 ended more than a year ago, in June 2009, according to the National Bureau of Economic Research. But the fallout lingers in the form of a rising unemployment rate. Economists say the economy will have to add up to 300,000 new jobs a month before the unemployment rate drops significantly.
"The U.S. may have to face the fact that unemployment is going to be high for a long time," said Drew Matus, a senior economist at UBS. "There are people who need to be retrained for new jobs and that will take time."
In corporate news, discount retailer Big Lots Inc. fell 4 percent after reporting that its third-quarter income dropped 42 percent.
Stocks overseas also fell. The Euro Stoxx 50 index, which tracks blue chip companies in countries that use the euro, fell 0.4 percent. Hong Kong's Hang Seng Index fell 0.6 percent.
The dollar dropped 0.9 percent against an index of six currencies. Gold and oil rose.

Source: Yahoo! Finance