Banks and other financial companies led a modest decline in U.S. stocks Friday after a report indicating that hiring slowed sharply in May put investors in a selling mood.
The market slide snapped a two-day winning streak and sent bond prices surging as investors sought safety in U.S. government-backed debt. The dollar also fell sharply against several major currencies.
The downbeat jobs data appeared to convince traders that the Federal Reserve will keep interest rates low longer than previously expected. It also stirred concerns that the economy is slowing.
The& Dow& Jones industrial average fell 31.50 points, or 0.2 percent, to 17,807.06. The Standard & Poor’s 500 index lost 6.13 points, or 0.3 percent, to 2,099.13. The Nasdaq composite index gave up 28.85 points, or 0.6 percent, to 4,942.52.
The Labor Department reported that the U.S. economy added only 38,000 jobs in May, the lowest amount in five years. The unemployment rate fell to 4.7 percent from 5 percent, but mainly because about half a million unemployed people stopped looking for work.
Separate reports out Friday also showed a mixed snapshot of the economy. The Institute of Supply Management said U.S. services firms grew in May at the slowest pace in more than two years, while the Commerce Department said orders to U.S. factories rose in April by the largest amount in six months.
The weak hiring data fueled speculation that the Fed will hold off on raising its key interest rate this summer, something Wall Street was anticipating could happen as soon as July. That weighed on banks and financial services companies, as low interest rates make it harder for banks to make money from loans.
ETrade Financial slumped $1.44, or 5.1 percent, to $26.69, while Charles Schwab lost $1.62, or 5.3 percent, to $29.22. Bank of America fell 52 cents, or 3.5 percent, to $14.42. Citigroup slid $1.58, or 3.4 percent, to $45.39.
The dollar also fell against other major currencies, falling to 106.68 yen from 108.91 the day before. The euro jumped to $1.1347 from $1.1148.
Traders also piled money into precious and industrial metals. Gold rose $30.30, or 2.5 percent, to $1,242.90 an ounce, while silver gained 34 cents, or 2.1 percent, to $16.37 an ounce. Copper added 4 cents, or 2.1 percent, to $2.11 a pound.
The rally in metals helped polish shares in some mining companies. Newmont Mining jumped $3.05, or 9.4 percent, to $35.40, while Freeport-McMoRan added 45 cents, or 4.2 percent, to $11.11.
Benchmark U.S. crude oil fell 55 cents, or 1.1 percent, to close at $48.62 a barrel in New York. Brent crude, which is used to price international oils, slid 40 cents, or 0.8 percent, to close at $49.64 a barrel in London.
In other energy futures trading, natural gas dropped 1 cent to close at $2.398 per 1,000 cubic feet. Wholesale gasoline slid 3 cents, or 1.7 percent, to close at $1.61 a gallon. Heating oil shed 2 cents, or 1.4 percent, to close at $1.49 a gallon.
In Europe, major stock indexes mostly fell. Germany’s DAX fell 1 percent, while France’s CAC 40 lost 1 percent. Britain’s FTSE 100 rose 0.4 percent.
Earlier in Asia, Japan’s benchmark Nikkei 225 added 0.5 percent, while South Korea’s Kospi inched up 0.04 percent. Hong Kong’s Hang Seng added 0.4 percent. The S&P/ASX 200 of Australia jumped 0.8 percent.