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U. S. stocks fall after solid jobs report suggest higher rates

The American flag and Wall Street street sign

The American flag and Wall Street street sign outside the New York Stock Exchange on July 15, 2013. Credit: AP / Mark Lennihan

U.S. stocks fell Friday after a solid jobs report kept alive the possibly that the Federal Reserve may raise interest rates as soon as next month. The losses put the Dow Jones industrial average on track for its seventh straight decline, its longest losing streak in four years.

KEEPING SCORE: The Dow Jones was down 101 points, or 0.6 percent, to 17,318 as of 2:12 p.m. Friday on Wall Street. The Standard & Poor's 500 index lost 12 points, or 0.6 percent, to 2,070 and the Nasdaq composite fell 42 points, or 0.6 percent, to 5,013.

JOBS: U.S. employers added 215,000 jobs in July, the Labor Department said Friday, another signal that the job market is steadily improving and providing another key piece of data for the Fed as it assesses whether the U.S. economy can withstand higher interest rates.

While the number was slightly below the 225,000 jobs Wall Street economists were forecasting, economists and traders said the data was still good enough to show that the U.S. economy continues to improve.

"This is another solid report that, in our view, meets the criteria for 'some further improvement' in labor market conditions and thus will keep the Fed in play in September," said Michelle Girard, an economist at RBS, in a note.

Fed policymakers have held rates at close to zero for more than six years to stimulate the economy after the Great Recession.

BONDS AND CURRENCIES: Yields on two- and three-year Treasury notes rose immediately after the report as investors factored in the higher probability of an interest-rate increase coming later this year.

The yield on the two-year note climbed to 0.72 percent from 0.69 percent on Thursday. It was as low as 0.41 percent in January.

Shorter-dated Treasuries would be most affected by the Fed raising rates.

The yield on the 10-year Treasury note fell to 2.18 percent from 2.23 percent a day earlier.

The euro rose 0.4 percent to $1.096, and the dollar fell 0.4 percent to 124.34 yen.

HIGH-DEFINITION: Nvidia, a maker of computer graphics cards, was the biggest gainer in the S&P 500. The stock jumped $2.36, or 11 percent, to $22.81 after it said sales of its high-end products jumped from last year.

COUPON CLIPPING: Groupon fell 29 cents, or 6.4 percent, to $4.38. The online coupon and deal service reported a profit for the second quarter, but cut its sales forecast for the current period, in part because of a strong dollar.

ACTIVIST STAKE: American Express jumped $4.16, or 5.5 percent, to $79.03 after Bloomberg reported that activist investors ValueAct Capital Management had amassed a $1 billion stake in the credit card company. Bloomberg cited a person familiar with the situation as saying that ValueAct could lobby for shareholder friendly changes at American Express.

EUROPE AND ASIA: European stocks remained mostly lower after the jobs data. Germany's DAX ended down 0.8 percent, France's CAC-40 lost 0.7 percent, and the U.K.'s FTSE 100 lost 0.4 percent.

The Shanghai Composite Index rose 2.3 percent, while Hong Kong's Hang Seng gained 0.7 percent.

ENERGY: Benchmark U.S. oil fell 61 cents to $44.06 a barrel on the New York Mercantile Exchange.

METALS: In metals trading, the price of gold rose $4 to $1,094 an ounce. Silver climbed 14.4 cents to $14.82 an ounce. Copper fell 0.8 cents to $2.33 a pound.


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