Stocks fall as June job losses exceed estimates
NEW YORK (AP) ó Stocks fell early Thursday after a new report showed more job losses than expected in June.
The U.S. unemployment rate also hit a 26-year high, following a similarly weak reports on jobs from overseas.
Recession-weary employers cut a larger-than-expected 467,000 jobs in June, suggesting that the economy’s road to recovery will be bumpy. The number was much worse than the 363,000 that economists expected.
The U.S. Labor Department’s unemployment figures also showed that the jobless rate rose to 9.5 percent last month from 9.4 percent in May. Economists had predicted a rate of 9.6 percent.
In early trading, the Dow Jones industrial average fell 148.58, or 1.8 percent, to 8,355.48. Standard & Poor’s 500 index futures declined 17.67, or 1.9 percent, to 905.66, while the Nasdaq composite index fell 39.53, or 2.1 percent, to 1,806.19.
Ovserseas markets also fell after a report showed unemployment in the 16 countries that use the euro rose to a 10-year high in May.
“This is part of the market recovery,” said Roy Williams, CEO of Prestige Wealth Management. “You’re going to get bad news.” Williams predicted the unemployment rate is likely to reach 11 percent.
However, he noted the reading is a lagging indicator and other recent data has shown the economy is beginning to improve. After the market’s surge from March lows, Williams said data like the jobless figures will give investors pause and sell stocks.
“Whenever you have runs like that, you have pullbacks before you can run again.”