Unemployment Rises, Stocks Fall

According to government records jobless rate is 9.5%, which is slightly less than what was expected, but nonfarm payrolls make 467,000 people jobless.
It was said by the Labor Department that in June US employers have cut down more jobs than what was expected by the analysts raising the unemployment rate up to 9.5%.

It had been the headline number that 467,000 jobs has been trimmed from nonfarm payrolls, investors were also greatly concerned about a decline that is observed in the average workweek, it falls to 33 hours in June from 33.1 in May. It has been indicated by this figure that a growing number of workers are underemployed, implying further declines in wages.

As the unemployment is expected to remain high in the US, consumer spending, which is a huge chunk of the economy, is unlikely to provide the backbone for a turnaround.

Stocks having high exposure to the condition of consumers were moving Thursday, along with energy stocks that declines as oil prices retreated. Crude falls $2.34 at $66.97 a barrel, pulling Exxon Mobil to $1.69, or 2.4%, lower, to $68.87. At the same time, the Vanguard Consumer Discretionary lost $1.24, or 3.4%, to $35.12.

By mid of the day the Dow Jones industrial average suddenly reduces 179 points, or 2.1%, to 8,325, and the S&P 500 fell 21 points, or 2.3%, to 902. The Nasdaq also reduces 45 points, or 2.4%, to 1,801.

Dow component Johnson & Johnson was in the news, as it has acquired Alzheimer assets from Elan and it has taken an 18.4% stake in the Irish drugmaker for $1 billion. J&J lost 88 cents, or 1.5%, to $56.19, while that of American depositary receipts of Elan shot up 96 cents, or 13.7%, to $7.96 in New York.

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