Big Increase In Jobless Rate Rattles Investors

Stocks ended a whirlwind session at moderately lower levels on Friday, after recovering some earlier losses tied to a surprising 0.3 percent jump in the nation’s unemployment rate.

The Dow Jones industrial average fell 16.26 to 4,343.40 after losing more than 30 points early in the session.

“The jobs numbers were so weak that they begin to raise questions about whether the soft landing could turn into a crash, maybe even go into a recession,” said Bob Walberg, market analyst a MMS International. “That has led some people to take profits.”

Despite a dip in the Dow, advancing issues logged a 7-to-6 lead on decliners on the New York Stock Exchange. Big-Board volume was heavy at 342.36 million shares as of 4 p.m., but below Thursday’s torrid pace of 434.93 million.

Stocks lost ground despite a spectacular rise in bond prices. The 30-year Treasury bond shot up nearly 2 points, pushing its yield, which falls when prices rise, down to just over 7 percent.

Stocks headed lower at the open, after the Labor Department said the civilian unemployment rate jumped 0.3 percent to 5.8 percent in April, the highest rate in seven months. The number of payroll jobs slipped by 9,000.

The report surprised many analysts, who had predicted that payrolls would grow by close to 200,000 and the unemployment rate would remain at 5.5 percent.

Some of the stocks that moved substantially or traded heavily Friday:

NYSE

Grace Co. rose 4 7/8 to 58 1/2.

Constantine Hampers, an executive vice president at the company, offered to buy Grace’s National Medical Care unit for $3.5 billion, The Wall Street Journal reports.

AMR Corp., down 1 3/8 to 67 1/4.

Delta Airlines fell 1 3/8 to 63.

UAL Corp. fell 3 5/8 to 115.

USAir Group unchanged at 7 3/4.

Airline stocks fell sharply, pushing the Dow transportation average lower, as a surprising surge in the nation’s unemployment rate caused worries about a possible recession.

Sallie Mae rose 4 to 45 1/4.

The Student Loan Marketing Association said it plans to buy back about 27 percent of its shares to quiet disgruntled shareholders who have seen the stock price drop.

Manpower fell 4 1/8 to 27 5/8.

Olsten fell 3 1/8 to 29 3/4.

Investors sold the shares of temporary-help agencies after seeing an upturn in the unemployment rate.

NASDAQ

Microsoft fell 1 1/2 to 80.

Bear Stearns downgraded the company to “neutral” from “attractive,” saying the stock has become too expensive.

Intel fell 1 1/4 to 108 5/8.

Novell fell 3/8 to 21 7/8.

Cisco Systems fell 1 to 41 5/8.

Computer stocks tumbled as investors took profits in a sector that had performed very well recently, following a report of a surprising rise in unemployment.

AMEX

Hanger Orthopedic rose 3/8 to 2 3/4.

First-quarter earnings were 3 cents per share, compared with a loss of 6 cents last year.