Dow Jones Industrial Average Trades Lower On Soft Jobs Report

U.S. stocks traded slightly lower Friday after a report showed the economy created slightly fewer than expected jobs in June. The soft employment report left investors wondering whether the U.S. Federal Reserve will remain on course to lift interest rates in September.

The Dow (INDEXDJX:.DJI) fell 34.14 points, or 0.19 percent, to 17,723.77. The Standard & Poor’s 500 index (INDEXSP:.INX) dipped 3.22 points, or 0.15 percent, to 2,074.19. And the Nasdaq Composite (INDEXNASDAQ:.IXIC) lost 16.06 points, or 0.32 percent, to 4,997.09.

Although the report came in just below consensus forecasts, experts say it suggests the U.S. economy is regaining momentum following a winter slowdown, meaning the Federal Reserve will likely still raise interest rates this fall.

“The report was somewhat light of consensus but still consistent with an economy that’s in expansion,” said Eric Wiegand, senior portfolio manager at U.S. Bank Wealth Management. “The key takeaway is this should reassure investors that the trajectory of any change in the Fed’s policy will likely be very moderate.”

U.S. employment rose by 223,000 jobs in June and the unemployment rate fell to 5.3 percent, the Labor Department said Thursday. The report was forecast to show employers adding 230,000 jobs last month and the unemployment rate was expected to tick down to 5.4 percent, according to analysts polled by Thomson Reuters.

Although the number of jobs created last month came in slightly below forecasts, economists say it is offset to some degree by the fall in the unemployment rate, to 5.3 percent from 5.5 percent in May.

“We still think the Fed will hike interest rates in September,” Paul Dales, senior U.S. economist at Capital Economics, said in a research note Thursday, adding that the data shows that the economy is back on track after the weakness in March and April. “With other measures suggesting that wage growth has risen and with the unemployment rate on a sustained downward trend, a September rate hike is very much in play,” Dales said.

Chemical maker DuPont Co. was the largest decliner in the Dow Thursday, falling nearly 2 percent, while chip maker Intel Corporation was the biggest gainer, up 1.6 percent.

The S&P 500 utilities sector fell 1.7 percent, led by a 62 percent plunge from energy holding company NiSource Inc.

Market professionals continue to watch Greece's ongoing debt crisis after Athens defaulted on its debt to the International Monetary Fund. The Greek government announced this week a bailout referendum would be held on Sunday for Greek citizens to vote on whether to accept creditors’ proposals.

The U.S. financial markets will be closed Friday for the Fourth of July holiday weekend.