Jobs report hurts stocks, dollar

August 7, 2010 at 12:00a.m.

Associated Press

NEW YORK

Safety first. That appears to be the new motto for investors trying to figure out how bad the emerging slowdown in U.S. economic growth is going to be.

A disappointing jobs report sent investors out of stocks and the dollar Friday and into assets perceived as being safer. Foreign currencies and gold rose, as did bond prices, which sent interest rates lower. The yield on the two-year Treasury note hit a record low.

Stocks sank for most of the day but pared their losses in late-afternoon trading. The Dow Jones industrials ended down 21 points after being down as much as 160 earlier in the day.

A closely watched monthly employment survey from the Labor Department confirmed what investors have been fearing: The U.S. economic recovery is weakening. Private job growth was just 71,000 in July. That’s below what analysts had hoped for and far shy of the level that would be needed to reduce the unemployment rate, which remained steady at 9.5 percent.

It was latest sign that a slowdown in U.S. growth is the real problem with the global economy, not the European debt crisis that had financial markets in a tizzy for much of the spring.

U.S. stocks fell on the report, sapping a strong upward trend from the past four weeks. The yield on the two-year Treasury reached a record low of 0.50 percent, and the yield on the 10-year Treasury is its lowest since April 2009. The dollar dropped to a 15-year low against the Japanese yen.