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Monthly job report brings stocks down

NEW YORK — Stocks posted modest losses Friday after a disappointing monthly jobs report brought fresh concerns that a recovery in the troubled labor market may be a long way off.

The Labor Department said employers cut 263,000 jobs last month, more than the 201,000 cut in August and worse than the 180,000 economists were expecting. The unemployment rate rose to 9.8 percent, in line with forecasts.

“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.

Meanwhile, a surprise drop in factory orders extended the recent string of disappointing economic readings. The Commerce Department said factory orders fell 0.8 percent in August following a 1.4 percent gain in July. Analysts had been expecting a 0.7 percent increase.

The market’s optimism has been tested this week by a number of economic indicators that have either weakened or fallen short of expectations, a disappointment after several months of hopeful signs on key industries like housing and manufacturing. That has led investors to question whether the 50 percent surge in stocks over the past six months can be sustained.

With nerves running high, stocks have fallen in seven of the last eight days. The Dow Jones industrials have pulled back about 4.3 percent since coming within 82 points of the 10,000 level last week.

“People have had a long, hard week,” said Bruce Shalett, managing partner at Wynston Hill Capital in New York.

Many found the relatively calm response to the jobs report encouraging, taking it as a sign that there are still investors willing to use the dips to pick up stocks they consider cheap.

“Pullbacks are going to constantly be used as opportunities to get into the market,” said Hank Smith, chief investment officer of equity at Haverford Investments in Radnor, Pa.

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