(Refiles to fix typo to read '8-to-7' in final paragraph)
* U.S. July payrolls fall 131,000, more than expected
* Kraft Foods shares up after quarterly results
* Dow drops 0.2 pct, S&P off 0.4 pct, Nasdaq down 0.2 pct
* For up-to-the-minute market news see []
(Updates to close)
By Chuck Mikolajczak
NEW YORK, Aug 6 (Reuters) - U.S. stocks fell on Friday
after government data showed a larger-than-expected drop in
July payrolls, giving investors a stark reminder the economic
recovery remains slow.
Stocks had been rising over the past five weeks, largely
on the back of solid corporate earnings. The S&P 500 is still
up 9.7 percent from its closing low for the year set July 2.
"The hope was that we would have a great earnings season,
and frankly the S&P has delivered on that in spades," said
Peter Kenny, managing director at Knight Equity Markets in
Jersey City, New Jersey.
"The disappointment is that in spite of the delivery of
great earnings, you still have an economy that is not engaged
and clearly not improving on the employment front."
The U.S. economy lost 131,000 jobs in July -- more than
twice the decline of 65,000 that economists forecast in a
Reuters poll. And the closely watched private employment
number rose less than expected. For details, see
[]
Of the 443 companies in the S&P 500 that have reported
earnings to date, 75 percent have reported earnings above
analysts' expectations, with only 9 percent missing estimates,
according to Thomson Reuters data.
Consumer stocks ranked among the worst performers as the
monthly jobs report highlighted worries about consumer
spending, which accounts for about two-thirds of U.S. economic
activity. Retailer Office Depot <ODP.N>, which sells school
and office supplies, slid 7 percent to $4.54, while the S&P
consumer discretionary index <.GSPD> shed 0.5 percent.
The Dow Jones industrial average <> dropped 21.42
points, or 0.20 percent, to 10,653.56. The Standard & Poor's
500 Index <.SPX> shed 4.17 points, or 0.37 percent, to
1,121.64. The Nasdaq Composite Index <> lost 4.59 points,
or 0.20 percent, to 2,288.47.
For the week, the Dow and the S&P 500 each rose 1.8
percent, while the Nasdaq advanced 1.5 percent.
Dow component Kraft Foods Inc <KFT.N> was among the bright
spots, rising 2.4 percent to $30.36 after the company, whose
products include Kraft cheese and Maxwell House coffee,
reported a higher-than-expected quarterly profit. Kraft also
raised its target for cost savings from its acquisition of
Cadbury, the British company known for its chocolates.
[]
Shares of American International Group Inc. <AIG.N>
climbed 2.6 percent to $40.93 after its quarterly results
topped Wall Street's expectations and its chief executive said
the insurer is actively looking to repay its taxpayer
bailout.
Shares of grain companies like Archer-Daniels-Midland Co
<ADM.N> and Bunge Ltd <BG.N> continued to outperform the
overall market after rallying more than 5 percent on Thursday,
on expectations their wheat exports will be increased by
Russia's decision to suspend grain shipments as it faces its
worst drought in a century.[]
Bunge shot up 2.2 percent to $55.66, while
Archer-Daniels-Midland slipped 0.2 percent to $30.18.
Volume was light, with about 7.17 billion shares traded on
the New York Stock Exchange, the American Stock Exchange and
Nasdaq, below last year's estimated daily average of 9.65
billion.
Declining stocks outnumbered advancing ones on the New
York Stock Exchange by a ratio of about 8-to-7, while on the
Nasdaq, three stocks fell for every two that rose.
(Reporting by Chuck Mikolajczak; Additional reporting by
Rodrigo Campos; Editing by Jan Paschal)
