By Angelo Young -
The Dow Jones Industrial Average followed European market declines on Friday after oil prices fell and U.S. jobs figures showed the unemployment rate dropping in December, as wages decreased and the number of Americans who dropped out of the labor force ticked upward. The Dow, which measures the share prices of 30 large industrial companies, shed 170 points to 17,737.
After a two day rally, the broad-based S&P 500 lost 17 points to 2,044, led by drops in industrials, goods and services and energy stocks, while the tech-heavy Nasdaq dropped 32 points to 4,704. For the week, the Dow and the Nasdaq declined 0.5 percent while the S&P 500 fell 0.6 percent.
On Friday, the U.S. Labor Department said the unemployment rate dropped to 5.6 percent in December. But hourly wages also declined by a nickel and hour, to $24.57, and the number of Americans who gave up looking for work increased.
"We finally got the jobs growing," Erik Davidson, deputy chief investment officer of Wells Fargo Private Bank, told The Associated Press. "Now people are looking through that at the actual wage growth numbers and they want to see improvement on wages, which obviously would spur demand and consumer confidence."
After a brief respite on Thursday, oil prices continues their march downward. West Texas Intermediate dropped 58 cents to $48.21 a barrel in New York while Brent, the global benchmark oil price, lost $1.01 to $49.95 in London.
Meanwhile, European markets were all in the red, led by the German DAX, which lost 189 points to close at 9,648. France’s CAC 40 shed 81 points to 4,179 while London’s FTSE declined 69 points to 6,501. Europe’s markets fell after Germany reported an unexpected downturn in industrial output with exports slowing.
Uncertainties about the health of the global economy have been causing significant market volatility. The euro zone is facing a Greek snap election later this month that leaves the question of an exit from the euro for the Mediterranean state. China is facing tepid growth this year while Couth American economies remain soft.