Dow giants weather market storm

A three-day rally on the stock market faded Friday after a mixed jobs report and credit-rating cuts for Italy and Spain.

The Dow Jones industrial average rose in the morning, turned lower at midday, rallied for a bit but then fell 124 points the last half-hour of trading. The latest day of choppy trading left the Dow with a loss of 20 points, following a 468-point surge over the previous three days.

Banks fell more than the broader market as the downgrades of Italy and Spain by the Fitch agency renewed concerns about Europe’s debt crisis and the fallout it could have on banks. Bank of America Corp. plunged 6 percent, the most in the Dow. JPMorgan Chase & Co. was close behind, at 5.2 percent.

The Dow Jones industrial average dropped 20.21 points, or 0.2 percent, to 11,103.12. Stocks that tend to do well even during economic downturns fared the best. Wal-Mart Stores Inc. led the Dow with a 1.8 percent gain. Drugmaker Pfizer Inc. rose 1.2 percent.

The Labor Department’s closely watched report on unemployment contained mixed news for investors.

U.S. employers added 103,000 jobs last month, about double what economists had expected. The government also said more jobs were added in July and August than previously reported. Economists said the report countered short-term fears that the U.S. might be entering another recession.

Yet it offered few signs that strong growth will return soon. The U.S. unemployment rate remained steady at 9.1 percent for the third straight month. The payroll gains weren’t enough to bring the unemployment rate down, or even to keep up with growth in the U.S. population.

Broader indexes and small-company stocks didn’t do as well as the large companies that make up the Dow. The Standard & Poor’s 500 index fell 9.51 points, or 0.8 percent, to close at 1,155.46. The broader index still gained 2.1 percent for the week, the second week it has made gains out of the previous six.