Stocks slip as job data come in strong

Stocks fell and bond yields soared Friday as job data showed economic strength, raising worries that the Federal Reserve may resume raising interest rates. The Dow Jones industrial average posted its longest losing streak in more than a year.

Bond yields surged on the Labor Department’s monthly jobs report, with rates on the benchmark 10-year U.S. Treasury note posting their biggest daily rise since July 2005. Yields on bonds rise as their prices fall.

The report showed the U.S. unemployment rate fell to 4.4% in October, the lowest level in more than five years. The unexpectedly tight job market dimmed hopes that the Fed might begin cutting interest rates early next year, said Kevin Flanagan, fixed-income strategist for global wealth management with Morgan Stanley.

“A Fed ease will come later rather than sooner,” he said.

The yield on the 10-year T-note shot up to 4.72%, from 4.6% Thursday.

The Dow closed below 12,000 for the first time since Oct. 18. Consumer-oriented stocks such as McDonald’s and Wal-Mart Stores were among those slipping, and a jump in oil prices contributed to losses.

The Dow Jones industrial average fell 32.50 points, or 0.3%, to 11,986.04. The Standard & Poor’s 500 index slipped 3.04 points, or 0.2%, to 1,364.30. The Nasdaq composite index declined 3.23 points, or 0.1%, to 2,330.79.

For the week, the Dow slid 0.9% and the S&P; 500 fell nearly 1%. The Nasdaq dropped 0.8%.

Crude oil for December delivery rose $1.26 on Friday to settle at $59.14 a barrel on the New York Mercantile Exchange after U.S. diplomats in Lagos, Nigeria, warned that a militant group might have imminent plans to launch attacks on oil facilities in that country.

The rise in crude prices helped some energy stocks, including Exxon Mobil, which climbed 96 cents to $72.15.

The biggest drag on the Dow was McDonald’s, down 1.9%, or 81 cents, to $41.24. The fast-food chain’s customers include senior citizens and others on fixed incomes, who are particularly sensitive to rising energy costs.

Shares of Wal-Mart, the world’s biggest retailer, fell after it lowered prices on nearly 100 key electronics items such as plasma televisions for the holiday season. The stock dropped 1.6%, or 76 cents, to $47.53, marking its worst weekly percentage loss in more than four years. Wal-Mart was the second-heaviest weight on the Dow and ranked among the S&P; 500’s biggest losers.

Wal-Mart’s price cuts pressured stocks of specialty electronics chains Best Buy and Circuit City Stores. Best Buy sagged 1%, or 55 cents, to $52.43, while Circuit City’s shares slipped 0.6%, or 16 cents, to $25.95.

Whole Foods Market shares saw their biggest decline in nearly eight years, a day after the natural foods grocer said sales growth would slow.

The stock was the biggest drag on the Nasdaq and among the top losers on the S&P; 500 index. Whole Foods stock plunged 23.1%, or $13.86,to $46.26.

JDS Uniphase, a maker of communications gear, and Electronic Arts, the world’s biggest maker of video games, enjoyed the steepest advances in the S&P; 500 after both reported better-than-expected earnings.

Shares of JDS Uniphase surged $2.30, or 16%, to $16.58. The company said it earned 3 cents a share in the fiscal first quarter, excluding some items. That beat the 1-cent average of profit estimates by analysts in a Thomson survey.

Electronics Arts climbed $6.24, or 12%, to $59.24 after its second-quarter profit, excluding some costs, rose to 21 cents a share, beating the average 2-cent estimate. The company also boosted its full-year forecast.

Decliners outpaced advancers on the Big Board by about 6 to 5. On Nasdaq, though, about eight stocks rose for every six that fell.

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Bloomberg News was used in compiling this report.