Stocks drop on solid jobs data; Dow down for 7th day

August 11 00:53 2015

The Dow Jones industrial average tumbled more than 100 points Friday before cutting its losses in half as news of solid jobs gains in July fueled speculation the Federal Reserve will raise interest rates when it meets in September. The Dow, which at its low for the day was off 128 points, rebounded to close down just 46 points, or 0.3%, at 17,374 based on preliminary figures. The Standard & Poor’s 500 fell 0.3% to 2078 and the Nasdaq composite lost 0.3% to 5044.1215-stock-market_full_600

The Labor Department said 215,000 jobs were added last month and the unemployment rate stayed unchanged at 5.3%. Economists surveyed by Bloomberg had expected payroll gains of 225,000. A “number over 200K may also be all that is necessary to convince the Fed to lift rates in September — and that’s pushing the dollar higher,” said Alastair George, chief strategist at Edison Investment Research.

Even though the market rebounded in the afternoon, the small loss was enough to qualify as Wall Street’s worst losing streak since 2011 — at least in terms of consecutive losses for the Dow. Friday’s 46-point drop in the Dow was the blue-chip barometer’s seventh-consecutive loss. The Dow has fallen every session since July 29, and at Friday’s close it had lost 378 points, or 2.1%, in that losing streak. But the stock market’s problems really extend back to before the summer started. Including Friday’s drop, the Dow now is down 5.1% from its record close of 18,312.39 back on May 19. However, the broader S&P 500 is holding up a lot better, down 2.5% from its record close of 2130.82 set on May 21. The Nasdaq composite is in the middle of the performance pack for the big three U.S. indexes, down 3.4% from its record close of 5218.86 on July 20.

Second-quarter earnings season is winding down, with nearly 90% of S&P 500 companies having reported. And one thing you can’t blame the stock market’s current problems on is corporate profits. Roughly 442 companies have reported second-quarter results, according to data from earnings tracker Thomson Reuters I/B/E/S. And right now it looks like profits are going up 1.6% from last year’s second quarter. That is a lot better than expected. Analysts had been expecting this quarter to be the first time U.S. companies reported a year-over-year earnings drop in six years,

In other world markets Friday, Asian stocks climbed, with Japan’s Nikkei 225 gaining 0.3%, Hong Hong’s Hang Seng up 0.7% and the Shanghai Composite jumping 2.3%. European benchmarks were mixed, with Britain’s FTSE 100 down 0.1%, Germany’s DAX 0.6% lower and France’s CAC 40 up 1.4%.