Stocks fall as oil price rises amid attack threats

NEW YORK – Wall Street ended a dismal week with its third straight decline Friday after oil prices jumped on word of possible attacks in Nigeria near production facilities. The rise in oil prices sapped enthusiasm over a Labor Department report that the nation’s unemployment rate fell to a five-year low.

The Dow Jones industrial average logged its first six-day consecutive drop since June 2005 after light, sweet crude rose $1.26 to $59.14 on the New York Mercantile Exchange. U.S. diplomats in Nigeria warned that militants are planning a series of kidnappings and bombing attacks in the coming days in areas where oil is extracted.

The Labor Department said the unemployment rate fell to 4.4 percent last month from 4.6 percent in September, easing some concerns that the economy has slowed too quickly. For more than a week, investors have been nervous about the strength of the economy following a stream of disappointing data. While Wall Street wants growth to cool so the threat of inflation will dissipate and the Federal Reserve can cut interest rates, a precipitous slowdown could slice into consumer spending and corporate profits.

Alan Gayle, senior investment strategist and director of asset allocation for Trusco Capital Management, said the employment figures suggest the economy has more power than expected going into the holiday spending season but warned that the strength could make the Fed uneasy. “Investors have to digest the notion that the Fed is going to remain poised to lift interest rates as we go into 2007.”

The Dow closed down 32.50, or 0.27 percent, at 11,986.04. It was the average’s first close under 12,000 since Oct. 19, when it finished above that milestone for the first time.

Broader stock indicators also closed lower. The Standard & Poor’s 500 index fell 3.04, or 0.22 percent, to 1,364.30, and the Nasdaq composite index fell 3.23, or 0.14 percent, to 2,330.79.

For the week, the Dow fell 0.86 percent, while the S&P lost 0.95 percent and the Nasdaq lost 0.84 percent.

Friday’s economic data sent bonds falling sharply; the yield on the benchmark 10-year Treasury note jumped to 4.71 percent from 4.60 percent late Thursday. The dollar was mixed against other major currencies, while gold prices rose.

Though the 92,000 new jobs last month fell short of the 125,000 economists expected, figures for August and September were revised sharply higher. October was the third straight month the unemployment rate showed a decline.

The markets showed little reaction to a second dose of good economic news Friday.

The Institute for Supply Management, an organization of corporate purchasing executives, said its index of the service sector rose to 57.1 in October from 52.9 in September; the reading was stronger than expected.

Declining issues outnumbered advancers by about 6 to 5 on the New York Stock Exchange, where volume came to 1.51 billion shares compared with 1.67 billion traded Thursday.

The Russell 2000 index of smaller companies rose 2.60, or 0.35 percent, to 752.73.

Overseas, Britain’s FTSE 100 closed down 0.02 percent, Germany’s DAX index rose 0.29 percent, and France’s CAC-40 advanced 0.49 percent. Markets were closed in Japan for a national holiday.