NEW YORK — Stocks were down in midday trading today after the U.S. government disappointed investors with news that hiring slowed down sharply last month.
The Labor Department reported that only 74,000 jobs were added to payrolls in December, the fewest in three years and far less than economists were expecting. The unemployment rate fell, but mostly because many people stopped looking for work.
The dollar fell and bond prices rose as investors expected the Federal Reserve to keep interest rates low for a while. Utility stocks rose as investors sought out low-risk places to park money.
The Dow Jones industrial average was down 53 points, or 0.3 percent, at 16,391 as of noon Eastern time. The Standard & Poor’s 500 index was down four points, or 0.2 percent, at 1,835 and the Nasdaq composite lost seven points, or 0.2 percent, to 4,149.
The Labor Department said the unemployment rate fell last month to 6.7 percent from 7 percent, but mostly because more Americans stopped looking for jobs. The government counts people as unemployed only if they are actively searching for work.
“Almost every other piece of data we have gotten showed that the pace of economic growth was picking up. This report might be an outlier,” said Kate Warne, an investment strategist with Edward Jones. “We need to see more evidence before concluding that all the other indicators are wrong.”
Bond prices rose, sending yields lower. The yield on the 10-year Treasury note fell to 2.88 percent from 2.97 percent the day before. Investors interpreted the slowdown in hiring last month as a signal that the Fed won’t move quickly to make more cuts to its bond-buying program. “I think the weak number does take off the table the possibility that the Fed might accelerate its plans to (pull back),” said Dean Junkans, chief investment officer with Wells Fargo Private Bank.
Utility stocks were among the biggest gainers Friday as investors looked to pull back on risk. ConEd, Pacific Gas & Electric, and Edison International were all up 1 percent or more.
Alcoa fell the most in the S&P 500. The stock dropped 53 cents, or 5 percent, to $10.16. The aluminum company posted a $2.34 billion fourth-quarter loss late Thursday due to low aluminum prices. Removing one-time charges, the company earned a profit, but that still fell short of Wall Street expectations.
Target fell 70 cents, or 1 percent, to $62.64. The discount retailer said Friday that it now believes 70 million customers had their information stolen over the holiday season, nearly double what was previously thought. The company also cut its fourth quarter earnings outlook, saying the security breach caused customers to shop elsewhere during the holidays.
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