Stocks drop on unemployment rate news

NEW YORK (AP) - Stocks fell in early trading Friday after the government said more jobs were lost in October than expected, pushing the unemployment rate above 10 percent for the first time since 1983.

The report bodes poorly for consumer spending, a major component of economic activity. Consumers will keep a tight lid on their spending if they are worried about losing their jobs. And robust consumer spending is necessary to sustain the economic recovery.

As stocks sold off, safe-haven assets like Treasurys rose. Oil prices plunged.

The Labor Department said employers cut 190,000 jobs last month, less than the 219,000 jobs lost in September, but more than the 175,000 job losses economists had forecast. The unemployment rate jumped to 10.2 percent from 9.8 percent in September.

The market has been expecting unemployment to top 10 percent before peaking. But the pace of job losses has accelerated and the rate is likely to go higher.

The Dow Jones industrial average fell 37.71, or 0.4 percent, to 9,968.25. The Standard & Poor's 500 index fell 4.19, or 0.4 percent, to 1,062.44, while the Nasdaq composite index fell 5.71, or 0.3 percent, to 2,099.61.