Much awaited news came from the Labor department on Friday - the government reported that employers cut 125,000 jobs in the US economy mostly the result of the loss of temporary Census-worker jobs, which was in line with expectations.
The good news was the American unemployment rate fell from 9.7% in May to 9.5% in June. 83,000 new private-sector jobs were created - a modest figure that was weaker than expected. Only 33,000 private-sector jobs were created in the previous month.
Major indices fell to new 2010 lows with the Dow and Nasdaq at 8-month lows and the S&P 500 at a 9-month low. The S&P 500 is down 15% from its April high on concerns of the European debt crisis and the US economy. In other economic news, a government report showed May factory orders fell 1.4% after rising 1% in April.
Economists expected the orders to fall by 0.6%. Movers in the market today were drug makers which rallied on speculation of potential takeovers. Allergan which sells the Botox wrinkle smoother saw a huge gain of 7.2%. Biogen, the world’s largest maker of multiple-sclerosis medicines rose 5.8% while Genzyme, the world’s largest producer of drugs for rare genetic diseases advanced 5.9%.
GE, Caterpillar, and Bank of America led the Dow lower for the day. In commodities, oil prices fell 81 cents to $72.14 a barrel and gold for August delivery rose $1 to about $1,207 an ounce. Markets will remain closed on 5 July in observance of Independence day.