US stocks lower after mixed US job report, new Greek fears

Friday, June 26, 2015, Vol. 39, No. 26

NEW YORK (AP) — U.S. stocks fell in afternoon trading Thursday following the release of a mixed report on the U.S. job market and news that Greek finances are deteriorating as a Sunday referendum on terms of an international bailout nears. While U.S. payrolls grew overall, many people gave up looking for work and wage growth stalled. Investors drove bond prices up in a bet that the Federal Reserve will be in no hurry to raise interest rates soon.

KEEPING SCORE: The Dow Jones industrial average fell 53 points, or 0.3 percent, to 17,704 as of 1:14 p.m. Eastern time. The Standard & Poor's 500 index slipped dropped six points, or 0.3 percent, to 2,071. The Nasdaq composite fell 20 points, or 0.4 percent, to 4,992.

MORE JOBS: U.S. employers added 223,000 jobs in June and the unemployment rate fell to a seven-year low of 5.3 percent. But the rate fell mostly because many people out of work gave up trying to find a job and were no longer counted as unemployed. The report also said average hourly earnings rose 2 percent, slightly lower than consensus.

BOND BUYING: Investors bought bonds in anticipation that inflation, and interest rates, will remain low. The price of the benchmark 10-year Treasury note rose, pushing down its yield to 2.37 percent from 2.45 percent just before the jobs report came out.

ANALYST'S TAKE: "There is no wage pressure and therefore no inflationary pressure. The Fed should just let the economy run," said Steven Ricchiuto, chief economist at Mizuho Securities. "Maybe instead of hiking rates in September, maybe it'll be in December, maybe March."

GREEK WOES: The International Monetary Fund said Greece needs 50 billion euros ($56 billion) in new financing from October through 2018 because Athens has been slow to enact economic reforms. The analysis was made before Greece closed its banks and defaulted on IMF loans earlier this week. The outlook is worse now.

Greece's government plans to put austerity measures to voters on Sunday after European creditors rejected its latest proposal for a new aid program.

MERGER NEWS: Health Net rose $6.76, or 10 percent, to $71.82 after Medicaid coverage provider Centene said it will pay about $6.3 billion to buy the company. The deal is more evidence of managed-care companies looking to bulk up in response to the federal health care overhaul.

GUSHER: U.S.-listed shares of BP rose $1.90, or 5 percent, to $41.18 after the oil driller reached an $18.7 billion settlement with several states to resolve litigation over the 2010 Gulf of Mexico oil spill.

EUROPEAN STOCKS: Germany's DAX fell 0.7 percent and France CAC 40 dropped 1 percent. Britain's FTSE 100 rose 0.3 percent.

ASIA'S DAY: Japan's Nikkei 225 rose 1 percent and South Korea's Kospi added 0.5 percent. Hong Kong's Hang Seng gained 0.1 percent and Australia's S&P/ASX 200 advanced 1.5 percent. China's Shanghai Composite slumped 3.5 percent.

U.S. HOLIDAY: U.S. markets will be closed Friday in observance of the Independence Day holiday.