Dow tumbles on weak jobs report

NEW YORK (AP) – A disappointing jobs report dragged stocks lower Friday. Banks took a hit after a Massachusetts court upheld a ruling in a foreclosure case against US Bancorp and Wells Fargo & Co. that could lead to more trouble for lenders.

The Dow Jones industrial average fell 22.55 points, or 0.2 percent, to close at 11,674.76.

The Standard & Poor’s 500 index fell 2.35, or 0.2 percent, to 1,271.50. The Nasdaq composite fell 6.72, or 0.3 percent, to 2,703.17.

The Labor Department said employers added 103,000 jobs in December, less than analysts expected. Job growth has remained sluggish in the US since the recession ended in June 2009.

A separate survey found that the unemployment rate fell to 9.4 percent last month. That’s a decrease from 9.8 percent in November and the lowest rate in 19 months. But the drop came partly because many people gave up looking for work.

“On balance, this was a pretty disappointing report,” said Hugh Johnson, chairman and chief investment officer of Johnson Advisors. It “suggests we have a long way to go to recover the 8.4 million jobs that we lost during the crisis.”

JPMorgan Chase & Co. and Bank of America Corp. were two of the biggest losers among the 30 stocks that make up the Dow. Banks fell as investors worried that the foreclosure ruling in Massachusetts could set a precedent for other cases against lenders. Bank of America, the largest holder of mortgages in the US, fell one percent to $14.25. JPMorgan lost two percent to $43.64.

The highest court in Massachusetts found that US Bancorp and Wells Fargo failed to prove that they owned the mortgages in two cases where homeowners were in foreclosure. Lenders have been under scrutiny from law enforcement officials since last fall over accusations that they bungled foreclosure proceedings and had shoddy record-keeping practices.

Bond prices rose, sending their yields lower. The yield on the 10-year Treasury note fell to 3.32 percent from 3.40 percent late Thursday. The yield helps set interest rates on many kinds of loans including mortgages.