Unexpectedly steep September job losses send stocks lower, extending market’s recent slide

Stocks fall as job losses rise more than expected

NEW YORK — Stocks dropped sharply early Friday after the government said more jobs were lost in September than expected.

The Labor Department said employers cut 263,000 jobs last month, up from 201,000 in August. That was far above the 180,000 job losses economists had been expecting. The unemployment rate rose, as expected, to 9.8 percent.

Unemployment has been one of the market’s biggest concerns throughout the recession because it has a big impact on consumer spending. Most economists expect the rate to surpass 10 percent by early next year.

“There’s been a lot of talk particularly in the last couple of months that we’re seeing a turnaround in unemployment, and obviously that’s not the case,” said Dan Cook, senior market analyst at IG Markets in Chicago.

Investors are picking up where they left off on Thursday, when the Dow Jones industrials lost more than 200 points. A spate of bad economic news leading up to Friday’s disappointing jobs data has investors rethinking the rally that began in March on the first signs of a turnaround.

In the first half hour of trading, the Dow fell 63.71, or 0.7 percent, to 9,445.57. The Standard & Poor’s 500 index fell 8.13, or 0.8 percent, to 1,021.72, and the Nasdaq composite index fell 10.37, or 0.5 percent, to 2,047.11.