jobs report

Stocks fall as September jobs report disappoints
Stocks fell moderately Friday after the government reported that more jobs were lost in September than expected.

The Labor Department said employers cut 263,000 jobs last month, up from 201,000 in August and worse than the 180,000 losses economists were expecting. The unemployment rate rose to 9.8 percent, in line with forecasts.

Unemployment has been one of the market's biggest concerns throughout the recession because lost jobs mean trouble for nearly every part of the economy, from consumers defaulting on loans, cutting back their spending and getting forced into foreclosure on their homes. Most economists expect the rate to surpass 10 percent by early next year.

"There's been a lot of talk particularly in the last couple of months that we're seeing a turnaround in unemployment, and obviously that's not the case," said Dan Cook, senior market analyst at IG Markets in Chicago.

A surprising decline in factory orders Friday was also troubling investors. The Commerce Department said factory orders fell 0.8 percent in August following a 1.4 percent gain in July. Analysts had been expecting a 0.7 percent increase.

The decline in stocks was more moderate than the previous day's big drop, when the Dow lost more than 200 points after a disappointing report on manufacturing activity dealt another blow to optimism that had been emerging about a recovery in the industrial sector.

A spate of bad economic news this week has led to even more doubts that the 50 percent surge in stocks over the past six months can be sustained. Though analysts say there aren't many near term catalysts that could jolt the market's rally back on track, investors may see bargains in the pullback and come back into the market. After coming within 82 points of the 10,000 level on Sept. 23, the Dow has pulled back about 4.5 percent.

In early trading, the Dow fell 51.01, or 0.5 percent, to 9,458.27. The Standard & Poor's 500 index fell 6.28, or 0.6 percent, to 1,023.57, and the Nasdaq composite index fell 4.22, or 0.2 percent, to 2,053.26.