Stocks slip on weak jobs report

NEW YORK (CNNMoney)

The government said Friday that employers added 162,000 jobs in July, below forecasts. But the unemployment rate did fall to 7.4%.

The Dow Jones industrial average and S&P 500 both retreated from the all-time highs they hit Thursday. The Nasdaq slipped as well.

The response in the bond market was more pronounced. The yield on the 10-year Treasury note sank from about 2.74% before the report to 2.61%. That may be a sign that the Federal Reserve may not pull back on stimulus as quickly as some investors expected.

The Fed has repeatedly said that improvement in the job market would be a trigger for it to begin removing the liquidity it has been pumping into the market for the past few years. Some experts thought that this so-called tapering could begin as soon as September.

But Ishaq Siddiqi, market strategist at ETX Capital in London, said he thinks the Fed will not change its policy this year given the modest improvement in hiring.

"We need to see clear signs of sustainable improvement and stronger momentum in the jobs market before tapering can really start," he said.

The U.S. dollar was also under pressure following the jobs data. The greenback was down 0.7% versus the U.K. pound and 0.4% versus the euro.

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On the corporate front, Dell (DELL, Fortune 500) shares rose after the PC maker announced a buyout deal with founder Michael Dell and Silver Lake Management.

On the earnings front, Toyota (TM) reported a 94% jump in quarterly profit, helped by a weaker yen.

Viacom (VIA), the media company that owns cable networks MTV and Nickelodeon. reported a jump in quarterly revenue and profit.

Shares of Weight Watchers (WTW) plunged after the company reported weak earnings and announced that CEO David Kirchhoff will step down.

After the closing bell, LinkedIn (LNKD) reported better-than-expected results and boosted its full-year forecast. The stock surged in early trading.

AIG (AIG, Fortune 500) shares rallied after the insurer announced plans to reinstate a dividend and buy back shares.

First Published: August 2, 2013: 9:50 AM ET

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