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News at a Glance

• Labor Update: Economy lost 467k jobs in June.
• Equities Fall: Investors disappointed by jobs report.
• Demand Rises: Factory orders top May consensus.
• Oil Slump: Crude prices down after inventories report.

The Lowdown

A short week on Wall Street came to a bleak ending.

Stocks took an steep fall Thursday, as traders recoiled after a disappointing June employment report. Each of the major indexes finished the day down more than 2.6%. The Dow Jones Industrial Average dropped 223 points to 8281. The Nasdaq gave up 49 at 1797, and the S&P 500 slipped 27 to 896.

All 30 of the Dow’s components ended the day in the red. Alcoa (AA), JPMorgan Chase (JPM) and Travelers Companies (TRV) were hit particularly hard.

The energy sector was also pummeled. Royal Dutch Shell (RDS.A) and ExxonMobil (XOM) each fell by more than 2.9% as oil prices fell on concern over demand. By 5 p.m., crude traded down $2.89 on the day at $66.42 a barrel.

The jobs report was a heavy weight on the broader market. Payrolls fell more than forecast in June, and the unemployment rate rose slightly, according to the Labor Department. Employers cut 467,000 jobs in June, compared to a decline of 345,000 in May. The unemployment rate hit 9.5%, up from 9.4% in May. Analysts had forecast payroll declines of 365,000 jobs and an unemployment rate of 9.6%.

World markets were broadly lower. In Europe, stocks fell Thursday after the European Central Bank held the Euro Zone’s benchmark interest rate at its record low of 1%. In Asia, stocks closed down on concern that the U.S. stimulus package isn’t doing enough to curb job losses.

Corporate News

• General Motors (GM) could file for an initial public offering in 2010, said Harry Wilson, an auto task force advisor who testified in U.S. bankruptcy court Wednesday. The company was in court to get approval to sell about 60% of its assets to the Treasury. The remainder will be owned by the Canadian government and a union reitree trust fund. GM could exit bankruptcy as soon as this month.
• Lear (LEA) plans to file for bankruptcy after reaching an agreement with secured lenders and bondholders, the company said Wednesday in a statement. The auto supplier is responding to a slowdown in sales brought on by a decline in production on the assembly lines of its major customers.
• Exelon (EXC) raised its hostile takeover bid for NRG Energy (NRG) by 12% to $7.45 billion after a drop in its share price reduced the premium it had offered. The revised bid is 7.9% higher than NRG’s closing price Wednesday.

The Economy

• Payrolls fell more than expected in June, declining by 467,000, compared to a decline of 345,000 in May, according to the Labor Department. The unemployment rate is now 9.5%, up from 9.4% in May. Unemployment was expected to reach 9.6%. Hourly earnings held steady at $18.53 after an increase of 0.1% in May. The average workweek fell by 0.1 to 33 hours. It was expected to hold steady at 33.1 hours. REPORT
• Weekly jobless claims fell to 614,000 in the week ending June 27, down from 627,000 the previous week, the Labor Department said. Forecasters had expected the number to come in at 615,000. REPORT
• Factory orders rose 1.2% in May, up from a revised April increase of 0.5%, the Commerce Department said. Factory orders, which reflect demand for durable and non-durable goods, had been expected to rise 0.9%. REPORT

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