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Stocks drop sharply after job growth disappoints

In this Thursday April 4 2013 phoTrader Anthony Riccio left specialist Peter Giacchi work floor New York Stock Exchange. Japan's

In this Thursday, April 4, 2013, photo, Trader Anthony Riccio, left, and specialist Peter Giacchi work on the floor of the New York Stock Exchange. Japan's benchmark stock index surged to its highest level in more than four years Friday April 5, 2013, its second straight day of big gains after the central bank announced aggressive action to lift the economy out of a prolonged slump. European stocks fell in early trading. (AP Photo/Richard Drew)

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Updated: April 8, 2013 1:25PM



NEW YORK (AP) — Stocks are closing lower on Wall Street after the U.S. government reported a sharp slowdown in hiring last month.

The Labor Department said hiring was the weakest in nine months.

The Dow Jones industrial average ended down 40 points at 14,565, a loss of 0.3 percent. It had been down as much as 171 points in the early going. The Dow ended flat for the week.

The Standard & Poor’s 500 fell six points, or 0.4 percent, to 1,553. The Nasdaq fell 21 points, or 0.7 percent, to 3,203.

The S&P had it worst week this year, and the Dow Jones Transportation Average had its worst week since September.

Slightly more stocks fell than rose on the New York Stock Exchange. Volume was thinner than average at 3.4 billion shares.

U.S. employers added just 88,000 jobs in March, according to the Labor Department’s monthly survey. That’s half the pace of the previous six months. It was a disappointment for markets following positive signs on housing and the job market over the winter.

The report, one of the most closely watched indicators of the economy, dented investors’ confidence that the U.S. was poised for a sustained recovery. The stock market has surged this year, pushing the Dow to a record. The index closed at an all-time high on Tuesday and is still up 10 percent this year.

“Things are still looking decent, but there’s no doubt that this was a bit of a disappointment,” said Brad Sorensen, Charles Schwab’s director of market and sector research. “We’re watching to see: is this the start of another soft patch?”

Investors will shift their focus to earnings reports next week.

Alcoa, the first company in the Dow index to report earnings, will release its first-quarter financial results after the markets close Monday. Analysts expect profits for S&P 500 companies to rise 0.6 percent in the first quarter compared with the same period a year earlier, according to S&P Capital IQ. That compares with an increase of 7.7 percent in the fourth quarter of 2012.

The yield on the 10-year Treasury note, which moves inversely to its price, plunged from 1.76 percent to 1.70 percent, its lowest level since December. The benchmark rate has declined sharply over the last month, from 2.06 percent on March 11, as demand for low-risk assets increased amid mounting evidence that growth in the U.S. economy is slowing.

Matthew Coffina, an editor at Morningstar StockInvestor, said stocks are still a better investment than bonds over the next ten years since bonds will be vulnerable to any rise in inflation or interest rates. “We still have a strong preference for stocks,” Coffina said.



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