NEW YORK (AP) — Stocks retreated on Wall Street early Friday after the U.S. government reported that only 80,000 jobs were created in June, the third straight month of weak hiring.
The Dow Jones industrial average dropped 134 points to 12,762 in the first hour of trading Friday. The loss wiped out the Dow‘s gain for the week.
Only the 30 stocks in the Dow average, only one rose, McDonald’s. The world’s largest producer of aluminum, Alcoa, and Caterpillar, the construction equipment maker, were the worst Dow stocks with declines of 3 percent each. Materials and industrial stocks like those are the most likely to suffer if the economy weakens.
The unwillingness of U.S. employers to add jobs quickly shows that the economy is still struggling three years after the recession officially ended. An average of just 75,000 jobs were created every month in the April-June quarter, far below the 226,000 created every month in the first three months of the year.
The weak jobs report led investors to shift money into low-risk assets. The price of the 10-year Treasury note rose, sending its yield down to 1.55 percent from 1.60 percent late Thursday. The dollar rose against the euro.
The sluggish growth in American jobs comes at a time when the global economy is also hitting the skids. Central banks in Europe and China took action Thursday to prop up their own sliding economies.
The new signs of economic sluggishness around the world sent commodities prices lower. Crude oil dropped $2.80, or 3 percent, to $84.41 a barrel on the New York Mercantile Exchange. Prices for other energy futures also fell.
Energy stocks fell sharply as a result. Peabody Energy fell $1.32, or 5 percent, to $24.81, while Alpha Natural Resources declined by 47 cents, or 5 percent, to $8.80.
In other trading on Wall Street, the Standard Poor’s 500 slid 12 points to 1,355 and Nasdaq composite fell 33 points to 2,942.
European markets also lost ground. A week after investors welcomed an agreement among European leaders to help Spain and Italy, the borrowing rates of both countries rose again. That means bond investors are less willing to loan those countries money at favorable rates.
The yield on the 10-year Spanish government bond rose 0.22 percentage point to 6.96 percent. That’s a very high level and could eventually force Spain to seek more financial support from its neighbors in Europe.
Italy’s 10-year borrowing rate rose 0.13 percentage points to 6.01 percent. The comparable rate on Germany’s government bond, which is seen as a safe haven for investors, fell to just 1.33 percent. That means investors are willing to accept a paltry return in exchange for holding a bond they consider to be ultra-safe.
European stock indexes also fell. Germany’s DAX lost 1.5 percent and France’s CAC-40 fell 1.3 percent.
Other Wall Street stocks making big moves included:
— Seagate Technology. The stock lost 67 cents, or 2.7 percent, to $24.41 after the hard drive manufacturer said its quarterly revenue will fall below analysts’ expectations because supply problems slowed down its shipments.
— Navistar International. The truck maker’s stock fell $1.48, or 5 percent, after the company reached a deal with federal regulators allowing it to continue shipping trucks while it makes a transition to a new emission-reducing technology.