A slide in financial and consumer stocks led U.S. indexes lower in midday trading Friday as investors weighed the implications of a key government report showing that hiring slowed sharply in May. The downbeat job survey was a sign of economic weakness that could dissuade the Federal Reserve from raising interest rates this month. The dollar fell sharply against most major currencies, while bond prices surged as investors sought safety in U.S. government-backed debt.
KEEPING SCORE: The Dow Jones industrial average fell 41 points, or 0.2 percent, to 17,796 as of 12:16 p.m. Eastern time. The Standard & Poor's 500 index shed eight points, or 0.4 percent, to 2,096. The Nasdaq composite index lost 32 points, or 0.7 percent, to 4,939.
US ECONOMY: The Labor Department reported that the U.S. economy added only 38,000 jobs in May, the lowest amount in five years. The unemployment rate fell to 4.7 percent from 5 percent, but mainly because about half a million unemployed people stopped looking for work. Separate reports out Friday also showed a mixed snapshot of the economy. The Institute of Supply Management said U.S. services firms grew in May at the slowest pace in more than two years, while the Commerce Department said orders to U.S. factories rose in April by the largest amount in six months.
THE QUOTE: The jobs report is likely to push the Federal Reserve to hold off raising its key interest rate any time soon, said Terry DuFrene, global investment specialist at J.P. Morgan Private Bank.
"It certainly takes off the table any kind of chance of a rate movement at all in the month of June," DuFrene said. "Now that's got to be pushed out until maybe the early fall before there's any sort of rate movement at all."
FINANCIALS STUMBLE: Several banks and financial services companies fell amid speculation that the Fed will opt not to raise its benchmark interest rate. Lower interest rates make it harder for banks to make money from loans. ETrade Financial slumped $1.47, or 5.2 percent, to $26.66, while Charles Schwab lost $1.70, or 5.5 percent, to $29.14. Citigroup fell $1.89, or 4 percent, to $45.08.
SALES SLUMP: Zumiez fell 4.2 percent after the clothing retailer said sales at older stores slumped in its fiscal first quarter. The stock shed 62 cents to $14.44.
GOLD RUSH: Mining companies were among the biggest gainers as the price of gold, silver and copper surged. Newmont Mining gained $2.66, or 8.2 percent, to $35.01, while Freeport-McMoRan added 35 cents, or 3.3 percent, to $11.01.
GOOD QUARTER: Investors bid up shares of Broadcom after the communications chip maker posted a bigger-than-expected profit in its fiscal second quarter. The stock climbed $8.92, or 5.8 percent, to $163.86.
NOT SO BAD: Gap rose 4.1 percent a day after the clothing chain operator said sales at established stores declined 6 percent in May, better than the 7 percent drop forecast by financial analysts. The stock added 75 cents to $19.08.
CHIPPER REPORT: Ambarella jumped 8.5 percent after the video compression chip maker's profit and revenue topped Wall Street's expectations. The stock rose $3.65 to $46.13.
BONDS AND CURRENCIES: U.S. government bond prices rose. The yield on the 10-year Treasury note fell to 1.71 percent from 1.80 late Thursday, a large move. In currency markets, the dollar was among the biggest movers, falling to 106.84 yen from 108.91 the day before. The euro jumped to $1.1334 from $1.1148.
ENERGY: Benchmark U.S. crude oil was down 49 cents, or 1 percent, to $48.68 a barrel in New York. Brent crude, which is used to price international oils, was down 37 cents, or 0.7 percent, at $49.67 a barrel in London.
MARKETS OVERSEAS: In Europe, major stock indexes mostly fell. Germany's DAX fell 1 percent, while France's CAC 40 lost 1 percent. Britain's FTSE 100 rose 0.4 percent. Earlier in Asia, Japan's benchmark Nikkei 225 added 0.5 percent, while South Korea's Kospi inched up 0.04 percent. Hong Kong's Hang Seng added 0.4 percent. The S&P/ASX 200 of Australia jumped 0.8 percent.
