Wall St drops on sluggish payrolls

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IOL bus jun23 wall street2 AP File photo.

Wall Street fell about 1 percent on Friday after U.S. employers hired at a dismal pace in June, setting the stage for the S&P 500 to end the week lower and raising the possibility the Fed will take action to revive the sluggish recovery.

The Labor Department said non-farm payrolls expanded by just 80,000 jobs in June, falling short of forecasts. The data raised pressure on the Federal Reserve to do more to boost the economy, and imperiled President Barack Obama's chances of reelection in November.

“After this, we can expect some Fed action at their next meeting. There is the anticipation but at the same time, we know that the Fed is running out of weapons,” said Tim Ghriskey, chief investment officer of Solaris Group in Bedford Hills, New York.

The Dow Jones industrial average was down 119.55 points, or 0.93 percent, at 12,777.12. The Standard & Poor's 500 Index was down 12.32 points, or 0.90 percent, at 1,355.26. The Nasdaq Composite Index was down 30.28 points, or 1.02 percent, at 2,945.84.

The S&P 500 was set to end the week about 0.4 percent lower.

In Europe, Spanish 10-year government bond yields extended their rise above 7 percent Friday, with investors dumping risky assets on worries about the efficiency of the anti-crisis tools available at the moment. Ten-year Spanish yields were 22 basis points higher on the day at 7.006 percent.

The hunt for Yahoo Inc's next chief executive appears to have narrowed to two candidates: Current interim CEO Ross Levinsohn and Hulu CEO Jason Kilar. The stock was off 0.4 percent at $15.79.

Buyout firm KKR plans to take over German cutlery and coffee machines maker WMF AG for at least 587 million euros ($727 million).

Skyrocketing sales of the Galaxy smartphone drove a record quarterly profit of $5.9 billion at Samsung Electronics . This is likely to stretch the firm's lead over rivals Apple and Nokia. Apple shares were off 0.7 percent at $606.05. -Reuters

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