Stocks, commodities retreat as Treasuries advance on jobs report

Stocks fell, extending a weekly loss, after U.S. employers added fewer jobs than forecast and services and manufacturing output in the euro region shrank more than estimated. Treasuries rose and oil dipped below $100.

The Standard & Poor’s 500 Index slipped 0.5 percent at 8:55 a.m. in New York and the Stoxx Europe 600 Index lost 1.2 percent, with both down more than 1 percent for the week. Benchmark gauges in Russia and India retreated at least 1.9 percent. The 10-year U.S. Treasury note yield fell three basis points to 1.91 percent. Oil dropped as much as 2.5 percent to lead commodities lower.

Concern that weakening economic data will drag stocks lower in May for a third straight year grew after Labor Department data showed payrolls climbed by 115,000 in April, the smallest gain in six months and less than the median economist forecast of 160,000. A purchasing managers index in Europe dropped to 46.7, below the initial estimate of 47.4, London-based Markit Economics said today.

“It’s a lousy jobs report,” said Michael Mullaney, who helps manage $9.5 billion as chief investment officer at Fiduciary Trust in Boston. “The headline number is well below expectations, but the figures are even murkier underneath the surface.”

The Labor Department report also showed private payrolls, which exclude government agencies, rose 130,000 after a revised gain of 166,000. They were projected to rise by 165,000, the survey showed. Factory payrolls increased by 16,000, the smallest in five months and less than the survey forecast of a 20,000 increase. The jobless rate unexpectedly fell to a three- year low of 8.1 percent as people left the labor force.

American International Group Inc., JPMorgan Chase & Co. and Schlumberger Ltd. paced losses among the biggest U.S. companies in pre-market trading. LinkedIn Corp. jumped as the biggest professional-networking website reported first-quarter sales and profit that topped analyst estimates.

Twelve companies in the U.S. gauge are due to release earnings today. Of the 419 companies in the index that have reported so far in the earnings season, 71 percent have posted per-share profit that topped estimates, according to data compiled by Bloomberg.

The Stoxx 600 extended this week’s retreat to 1.8 percent. Thirteen companies traded without the right to the latest dividend payment, removing 0.38 points, or more than a third of the decline, in the gauge, according to data compiled by Bloomberg. Wacker Chemie AG, the second-biggest producer of solar-grade silicon, fell 5.8 percent in Frankfurt after saying earnings before interest, taxes, depreciation and amortization for fiscal 2012 are expected to be “well below” the previous year.

European Elections

European stocks fell as and France, Germany and Greece prepared for elections this weekend. French voters go to the polls in a final runoff between President Nicolas Sarkozy and Socialist challenger Francois Hollande, while Germany’s Chancellor Angela Merkel’s party risks losing control of a state in a regional ballot. Greeks pick a new government in a national election.

The MSCI Emerging Markets Index dropped 0.6 percent. India’s Sensex Index sank 1.9 percent as the rupee weakened, spurring concern the government may find it hard to cool inflation and curb the fiscal deficit. The Micex Index lost 2.8 percent in Moscow.

The S&P GSCI gauge of 24 commodities dropped 1.4 percent, the third consecutive decline. Crude also fell for a third day, the longest streak in four weeks, to $100.02 a barrel in New York after dropping as low as $99.90.

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