U.S. Markets Slide On Unemployment Data

January 9, 2009 7:58 p.m. EST

New York, NY (AHN) - U.S markets opened lower Friday and continued that way after the Labor Department said the unemployment rate rose to 7.2 percent in December.

The Labor Department said that 2.6 million jobs were lost in 2008, the largest yearly drop in decades. The department also reported non-farm payrolls fell by 524,000 in December. The result was in line with economists' estimates.

The news pressured the markets all session. The Dow Jones Industrial average fell 143 points or 1.6 percent. A total 28 of 30 Dow components finished lower as selling was broad-based on Friday.

Citigroup, down 5.7 percent, and JP Morgan, down 4.6 percent, were the largest Dow laggards as the financial sector was weak on a whole.

The S&P 500 fell 19 points or 2.1 percent. All 10 major economic sectors finished the session lower.

Tech saw the biggest sell-off with the Nasdaq Composite shedding 45 points or 2.8 percent. The chip stocks weighed on tech the most with the Philadelphia Semiconductor Index falling 3.3 percent.

Oil was also pressured by the unemployment data as the weak economic outlook continues to raise demand concerns. The commodity shed 87 cents a barrel to settle at $40.83 after briefly dipping below the $40 mark.

In Corporate news, Chevron said their fourth quarter earnings will be drastically lower than third quarter results due to the declining price of oil.

Best Buy narrowed its fiscal 2009 earnings outlook after the retailer reported yesterday a 6.5 percent drop in December same-store sales.

Boeing announced it will cut 4,500 jobs from its commercial airplanes business unit in the second quarter of 2009 as it aims to reduce costs.

On the economic front, the Commerce Department reported a 0.6 percent drop in November wholesale inventories, slightly less than the 0.7 percent drop economists had expected.

Monday's market will be light on data as there are no economic reports set for release.