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The US economy adds jobs for the sixth month in a row but investors seem to have their minds on the fires burning in Europe.
Word that the US economy added jobs in December was mostly greeted with a shrug of indifference by investors on Wall Street today as key indices continued to slide after marking gains at the start of the New Year, The New York Times reported.
In a periodic jobs report, the US Labor Department announced that 200,000 jobs had been created in December, bringing the unemployment rate down from a revised 8.7 percent to 8.5 percent. Marking the sixth consecutive month that more than 100,000 jobs were created, the gains were genuine good news as new positions were created across industries with manufacturing, retail, warehousing and restaurants all hiring, according to The Times.
The news did not unleash euphoria among investors. At least not immediately. The Dow Jones Industrial average continued Thursday's declines, dropping 0.5 percent to 12,359.92 and the Standard & Poor's index of 500 stocks fell 0.3 percent to 1,277.81. (The Nasdaq rose 0.2 percent to 1,674.22).
Jonathan Lewis of Samson Capital Advisors said the European debt crisis could be distracted by Europe's woes and not paying attention to improving conditions in the States, according to The New York Times.
The Washington Post reported that bad news out of Europe continued unabated, with a drop in retail sales, persistently high unemployment in the 17-nation eurozone at 10.3 percent and 10-year Italian bonds edging above 7 percent due to anxiety ahead of new bond sales expected next week, making the long-term cost of borrowing unsustainable.
"That steady drumbeat has drowned out the boring, but ploddingly consistent, gentle upward slope of U.S. economic data," Lewis told The New York Times, adding that the jobs report "is not penetrating the noise."
Despite losses on Thursday and Friday, Wall Street did end up after the first week of 2012. The Dow had by today risen 1.2 percent and the S&P was up 1.6 percent. The fact that the markets were able to put in a positive performance despite the bad news out of Europe and word of potential disruptions in the oil supply was a good sign in itself, according to Jack de Gan, chief of investments at Harbor Advisory Corp in New Hampshire.
"The news coming out of Europe was negative all week and we're going to finish up, and I think that's a real good performance in light of the background," he was quoted as saying by Reuters.