Unemployment figures send stocks down

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By Joseph Weber

Wall Street tumbled Thursday after a report showed worse-than-expected job cuts in June.

The Dow Jones Industrial Average closed at 8,280.74, down 223.32 points. The broader Standard & Poor's 500 Index closed at 896.42, down 26.91 points, and the tech-heavy Nasdaq closed at 1,796.52, down 49.20 points.

U.S. employers cut 467,000 jobs last month, compared with 322,000 in May, increasing the unemployment rate to a 26-year high of 9.5 percent, the Labor Department reported. Economists expected 363,000 jobs to be cut. The unemployment rate in May was 9.4 percent.

The overseas markets also fell on similar unemployment news. Japan's Nikkei stock average fell 0.64 percent. Britain's FTSE 100 fell 2.45 percent, Germany's DAX index declined 3.81 percent, and France's CAC-40 fell 3.13 percent.

The closely watched U.S. unemployment report disappointed investors who began the third quarter Wednesday with gains after upbeat news on manufacturing.

Manufacturing activity declined for the 17th consecutive month in June, but the rate of contraction in the factory sector continues to be slower compared with the steep downturns during the fall and winter, reported the Institute for Supply Management (ISM) in Tempe, Ariz.

The manufacturing index increased by two percentage points to 44.8 last month. Index levels below 50 reflect a shrinking factory sector; levels above 50 indicate an expanding sector.

Investors sold off stocks and switched to bonds, increasing the price and lowering the yield. The yield on the benchmark 10-year Treasury note, which moves opposite its price, closed at 3.50 percent.

The dollar fell against other major currencies, and gold prices fell.

The market rally that began in March, after 12-year lows, has sputtered since June amid concerns that rising unemployment will slow the economic recovery, when it finally arrives.

U.S. markets are closed Friday for the Fourth of July weekend.