U.S. stock futures turn negative after slower-than-expected jobs growth

Stocks fell in early trading Friday after the government's much-anticipated employment report showed weaker-than-expected job growth and a rise in the unemployment rate.

The Labor Department's report that the nation's unemployment rate rose to its highest level since November 2005 and that employers raised payrolls by only 18,000 unnerved investors worried that a weakening job market will hurt consumer spending.

Investors had been awaiting the report for weeks as they tried to determine whether the economy would continue to benefit from robust consumer spending even as sectors like home construction, mortgage writing and manufacturing slow. Wall Street is concerned that areas of weakness could puncture growth and even tip the economy into recession if consumers can't depend on a solid job market.

Manufacturers, construction companies and financial services companies all cut jobs during the month amid an anemic housing market. Retailers also cut jobs.

The December report showed employers added the fewest jobs to their payrolls since August 2003. Economists had predicted a jobs growth figure of about 70,000 and an unemployment rate of 4.8 percent. Instead, unemployment climbed to 5 percent in December from 4.7 percent in November. While 5 percent unemployment is still considered good, the increase from November clearly made some investors nervous.

In the first minutes of trading, the Dow Jones industrial average fell 116.89, or 0.90 percent, to 12,939.83.

Broader stock indicators also fell. The Standard & Poor's 500 index declined 13.18, or 0.91 percent, to 1,433.98, and the Nasdaq composite index fell 36.86, or 1.42 percent, to 2,565.82.

Bond prices rose as investors sought the safety of government-backed debt after the report. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.85 percent from 3.89 percent late Thursday.