A disappointing jobs report dragged US stocks lower on Friday.
Banks took a hit after a Massachusetts court upheld a ruling in a foreclosure case against US Bancorp and Wells Fargo&Co that could lead to more trouble for lenders.
The Labour Department said employers added 103,000 jobs in December, less than analysts expected. Job growth has remained sluggish in the US since the recession ended in June 2009.
A separate survey found that the unemployment rate fell to 9.4% last month. That’s a decrease from 9.8% in November and the lowest rate in 19 months. But the drop came partly because many people gave up looking for work.
“On balance, this was a pretty disappointing report,” said Hugh Johnson, chairman and chief investment officer of Johnson Advisors. It “suggests we have a long way to go to recover the 8.4 million jobs that we lost during the crisis.”
The Dow Jones industrial average fell 22.55 points, or 0.2%, to close at 11,674.76.
The Standard&Poor’s 500 index fell 2.35, or 0.2%, to 1,271.50. The Nasdaq composite fell 6.72, or 0.3%, to 2,703.17.
JPMorgan Chase&Co and Bank of America Corp were two of the biggest losers among the 30 stocks that make up the Dow. Banks fell as investors worried that the foreclosure ruling in Massachusetts could set a precedent for other cases against lenders. Bank of America, the largest holder of mortgages in the US, fell 1% to 14.25 dollars. JPMorgan lost 2% to 43.64 dollars.
The highest court in Massachusetts found that US Bancorp and Wells Fargo failed to prove that they owned the mortgages in two cases where homeowners were in foreclosure. Lenders have been under scrutiny from law enforcement officials since last fall over accusations that they bungled foreclosure proceedings and had shoddy record-keeping practices.
“This court ruling is a reminder that banks are still facing some headwinds left over from the financial crisis,” said Alan Gayle, senior investment strategist at RidgeWorth Investments. “It’s going to be tough sledding for the financial industry until they get these mortgage problems sorted out.”