January 8, 2011 in Business

Stocks suffer dip on jobs report

Chip Cutter And Matthew Craft Associated Press
 

NEW YORK – A disappointing jobs report dragged stocks lower Friday. Banks took a hit after a Massachusetts court upheld a ruling in a foreclosure case against U.S. Bancorp and Wells Fargo & Co. that could lead to more trouble for lenders.

The Labor Department said employers added 103,000 jobs in December, fewer than analysts expected. Job growth has remained sluggish in the U.S. since the recession ended in June 2009.

A separate survey found that the unemployment rate fell to 9.4 percent last month. That’s a decrease from 9.8 percent in November and the lowest rate in 19 months. But the drop came partly because many people gave up looking for work.

“On balance, this was a pretty disappointing report,” said Hugh Johnson, chairman and chief investment officer of Johnson Advisors. It “suggests we have a long way to go to recover the 8.4 million jobs that we lost during the crisis.”

The Dow Jones industrial average fell 22.55 points, or 0.2 percent, to close at 11,674.76.

Even after falling for two days in a row, the Dow still gained 97.25 points for the week. That’s the sixth straight week of gains for the index.

JPMorgan Chase & Co. and Bank of America Corp. were two of the biggest losers among the 30 stocks that make up the Dow. Banks fell as investors worried that the foreclosure ruling in Massachusetts could set a precedent for other cases against lenders. Bank of America, the largest holder of mortgages in the U.S., fell 1 percent to $14.25. JPMorgan lost 2 percent to $43.64.

The highest court in Massachusetts found that U.S. Bancorp and Wells Fargo failed to prove that they owned the mortgages in two cases where homeowners were in foreclosure. Lenders have been under scrutiny from law enforcement officials since last fall over accusations that they bungled foreclosure proceedings and had shoddy record-keeping practices.

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