Share prices continued lower in midsession trade, as a weak employment report for November dashed hopes that an economic rebound is underway and offset a higher-than-expected US consumer confidence figure for December, dealers said.
At 12.05pm, the DJIA was down 62.14 points at 10,036.59. The S&P 500 was down 9.68 points at 1,157.42 and the Nasdaq composite was down 28.34 points at 2,025.93.
Share prices opened lower on all major indices on news that the unemployment rates jumped to 5.7% in November - the highest since August 1995 -, up from 5.4% in October.
Total non-farm payroll employment fell by 331,000 in November from the previous month. The consensus forecast of Wall Street economists was for total non-farm payrolls to fall by 192,000, and for the unemployment rate to rise to 5.6%.
"The employment data got the market off track this morning and gave an excuse to take profits ahead of the weekend," said Morgan Stanley senior trader Michael Lyons.
The weak job data bolstered expectations of another interest rate cut from the Federal Open Market Committee meeting next Tuesday, analysts said.
Shares prices remained in negative territory, with robust consumer confidence data failing to reverse sentiment. The University of Michigan consumer sentiment index rose to 85.8 in the preliminary December report, up from 83.9 in the final November reading. The consensus forecast of Wall Street economists was for the consumer sentiment index to rise to 84.0.
Volume was light, with investors refraining from activity ahead of the weekend, dealers said.
"Trading has been very, very slow as nobody wants to make a big bet ahead of the weekend," said Jefferies & Co chief market strategist Art Hogan.
In the financial sector, Charles Schwab rose $0.16 to 16.00, bucking the sector's downward trend, lifted by news it will close its brokerage operations in Australia and Japan due to weak market conditions and slower-than-expected progress in meeting financial objectives.
Bank of America shares were up $0.01 at 63.01, reversing early losses after the company earlier today announced it will sell its subprime real estate servicing operations, as well as the right to serve its existing portfolio, to Fairbanks Capital for an undisclosed sum.
American Express fell 0.50 to 34.66, JP Morgan Chase declined $0.51 to 39.89, and Citigroup shed $0.25 to 49.35.
Elsewhere, Lockheed Martin decreased $0.95, or 2.1%, to 45.25 after the group said it expects to book a $1.7bn charge in the fourth quarter to cover the cost of withdrawal from the global telecommunications services business.
Boeing shares rose $0.12 to 37.24 on reports that the group's new Sonic Cruiser aircraft could achieve speeds of 1,000 miles per hour.
Honeywell was up $0.15 at 34.25, with the group holding its annual shareholders meeting today.
In the media sector, AOL Time Warner was down $2.15, or 6.2%, at 32.64 after Merrill Lynch cut its fourth-quarter revenue and EBITDA estimates due to lowered estimates for the media giant's cable networks and publishing operations.
Peers Viacom fell 1.17 to 46.79, and Walt Disney decreased 0.05 to 22.50.
Among chipmakers, Advanced Micro Devices, up $1.97, or 12%, at 18.22 emerged as the sole gainer, after the company yesterday raised fourth-quarter sales estimates.
Intel fell $0.60 to 33.56, on some profit taking following the company's positive comments yesterday.
Motorola declined 0.34 to 16.96, and Texas Instrument was down 0.38 at 33.11.
Sun Microsystems shares fell $0.53, or 3.8%, to 13.61 as investors assessed a cautiously optimistic business outlook from the computer hardware giant yesterday.