US stocks turn negative after weak jobs report

US stocks turned negative early Friday after the much-watched December US employment report showed the economy added far fewer jobs than expected. About 40 minutes into trade, the Dow Jones Industrial Average fell 55.54 points (0.34 percent) to 16,389.22. The broad-based S&P 500 dropped 4.52 (0.25 precent) to 1,833.61, while the tech-rich Nasdaq Composite Index lost 9.97 (0.24 percent) at 4,146.22. The monthly Labor Department report said the US economy added just 74,000 jobs in December, well below the 197,000 expected by analysts. The unemployment rate fell by 0.3 percentage point to 6.7 percent, the lowest since October 2008, mainly due to people dropping out of the labor force. The news sent the dollar lower and depressed US Treasury yields, suggesting the market believes the US Federal Reserve may not move as quickly to taper its stimulus program. At the same time, the weak jobs report dented confidence in the strength of the US economy's recovery from the 2008-2009 downturn. Aluminum giant Alcoa sank 6.6 percent after reporting a $2.3 billion loss on a large write-down. Excluding special items, fourth-quarter earnings came in at four cents per share, three cents shy of expectations. Giant US retailer Target fell 1.3 percent after disclosing that the data breach to its payment system affected 30 million more customers than initially estimated. The company also said its holiday sales were marred by the episode as it slashed its earnings forecast. Sears Holdings plummeted 13.6 percent after reporting that comparable store sales fell 7.4 percent in the current fiscal fourth-quarter quarter to date. The company forecast a loss of $1.3-1.4 billion for the year. Gap rose 0.5 percent after announcing 1.0 percent increase in comparable sales for the key holiday shopping period. The company said full-year earnings would be "at the high end" of its previously released range after a "solid" holiday performance. Abercrombie & Fitch jumped 12.1 percent after it raised its fourth-quarter earnings forecast to $1.55-$1.65 per share from the prior guidance of $1.40-$1.50 due to better-than-expected sales and cost-cutting efforts. Bond prices rose. The yield on the 10-year US Treasury fell to 2.88 percent from 2.96 percent, while the 30-year declined to 3.82 percent from 3.87 percent. Bond prices and yields move inversely.