Dow Dives 24.54 as Market Reacts to Dip in Jobless Rate

The stock market fell Friday in subdued trading, dragged down by a bond market slump on a stronger-than-expected October employment report.

The Dow Jones index of 30 industrials lost 24.54 points to end at 2,145.80, its low point of the day. That gave the blue chip indicator a net loss for the week of 4.09 points.

In the broader market, declining issues outpaced advances by about 5 to 2 in nationwide trading of New York Stock Exchange-listed stocks.

Stocks started off sharply lower in response to the government’s report that unemployment fell to 5.3% in October, the lowest level in 14 years, as the economy created more than 300,000 jobs.

Non-farm payrolls rose 323,000 in October, while the September jobs gain was revised upward to 304,000, from a previously reported 255,000.

Stock prices made a quick recovery in the morning but later slid back in what analysts said was a close tracking of bond prices. Activity remained dampened, as it has through most of the week, by anticipation of next Tuesday’s presidential election.

The unexpectedly low jobless rate fueled concern that the economy could be heating up and that the Federal Reserve would move to rein in inflation by nudging interest rates higher.

“It was a negative surprise,” said Michael Metz, an analyst for Oppenheimer & Co.

Like stocks, bond prices were hurt by fears of higher interest rates. The yield on the Treasury’s closely watched 30-year bond, which moves inversely to its price, surged to 8.87% from 8.74% late Thursday.

“We’re kind of held captive to the bond market,” said Philip Puccio, a senior vice president at Dillon, Read & Co.

“There’s no question that the employment report was the piece of news that set the market reeling a bit,” said Charles Jensen, market analyst at MKI Securities Inc.

Earlier in the week, many observers had been expecting the Fed to keep credit policy and interest rates stable in the near future. Recent signs that the economy is slowing and inflationary pressures are easing would make the central bank loathe to push interest rates higher, they believed.

Concern Revived

But a recent slide in the dollar raised concern that the Fed could nudge interest rates higher in order to bolster the U.S. currency. The dollar steadied late in the week, but the fear of higher rates was rekindled by the unemployment figures--the final economic report before the election.

Volume on the floor of the NYSE totaled 143.58 million shares, down from 152.98 million in Thursday’s session. Nationwide, consolidated volume in NYSE-listed issues, including trading at regional exchanges and on the over-the-counter market, totaled 173.76 million shares.

The NYSE’s composite index of all its listed common stocks fell 1.38 to 155.70.

Among actively traded issues on the NYSE, Sears Roebuck dropped 1 3/8 to 44 5/8 after surging Thursday on takeover speculation, RJR Nabisco fell 3/4 to 85 5/8, IBM declined 7/8 to 120, AT&T; slipped 1/8 to 28 5/8 and Ford Motor lost 7/8 at 49 5/8.

Tenneco was up 1/2 at 50, Kraft was unchanged at 103 and DPL was flat at 27.

At the American Stock Exchange, the market-value index was down 2.28 at 297.52.

Standard & Poor’s industrial index fell 3.42 to 318.09, and S&P;’s 500-stock composite index was down 2.89 at 276.31.

Foreign Markets Down

The NASDAQ composite index for the over-the-counter market slipped 1.75 to 381.02.

The Wilshire index of 5,000 equities closed down 22.485 points at 2,726.252.

On the Tokyo Stock Exchange, the Nikkei 225-share index, which declined 28.41 points Wednesday, shed another 32.01 points to finish at 27,953.25. Japanese markets were closed Thursday for the Culture Day public holiday.

Share prices also finished lower on the London Stock Exchange, as the release of stronger-than-expected U.S. unemployment figures curbed the market’s earlier gains. The Financial Times 100-share index closed down 3.3 points at 1,834.3.