Stocks slump 143 points

NEW YORK - The first full week of 2009 didn't bring Wall Street any huge shocks, but it didn't bring much for investors be happy about, either.

A jump in unemployment sent stocks sharply lower Friday as investors feared that Americans won't soon deviate from their tightened budgets. The Dow Jones industrial average fell 143 points to end the week down nearly 5 percent.

The Labor Department's much-anticipated report showed employers cut 524,000 jobs in December, a smaller decline than the loss of 550,000 jobs economists forecast. But the unemployment rate jumped to a 16-year high of 7.2 percent - more than the 7 percent economists predicted - from 6.8 percent in November.

Lost jobs were not a shock to Wall Street, but the news still stung.

"People say that they know how bad the economy is. But they don't know how it feels to have the reality hit home," said Stu Schweitzer, global markets strategist at J.P. Morgan's Private Bank. "It's not the facts - it's how the facts feel. And it feels terrible to have so many Americans losing jobs, and so many more likely to follow in the coming months."

Rising unemployment tends to erode consumer spending, which accounts for more than two-thirds of U.S. economic activity. For all of 2008, the economy lost 2.6 million jobs - the most since 1945. Retailers have been reporting dismal holiday sales figures, and Wall Street is concerned about how long the economy will be suffering a pullback in consumer spending.

According to preliminary calculations, the Dow Jones industrial average fell 143.28, or 1.64 percent, to 8,599.18.

Broader stock indicators also lost ground. The Standard & Poor's 500 index fell 19.38, or 2.13 percent, to 890.35, and the Nasdaq composite index fell 45.42, or 2.81 percent, to 1,571.59.

The Russell 2000 index of smaller companies dropped 20.71, or 4.13 percent, to 481.30.

Declining issues outnumbered advancers by about 2 to 1 on the New York Stock Exchange, where volume came to a light 1.16 billion shares.

For the week, the Dow fell 4.8 percent, the S&P 500 slid 4.5 percent and the Nasdaq lost 3.7 percent.