U.S. stocks keep dropping amid jobs report

U.S. stocks continued to decline in the morning session Friday as Wall Street digested the highly- watched nonfarm-payrolls report.

By midday, the Dow Jones Industrial Average dipped 112.01 points, or 0.64 percent, to 17,307.74. The S&P 500 decreased 12.35 points, or 0.59 percent, to 2,071.21. The Nasdaq Composite Index shed 39.47 points, or 0.78 percent, to 5,016.97.

U.S. jobs report came out mostly in line with market expectations. U.S. total nonfarm payroll employment increased by 215,000 in July, compared with an average monthly gain of 246,000 over the prior 12 months, the U.S. Labor Department reported Friday. The unemployment rate was unchanged at 5.3 percent.

In July, average hourly earnings for all employees on private nonfarm payrolls rose by 5 cents to 24.99 U.S. dollars. Over the year, average hourly earnings have risen by 2.1 percent.

Some analysts thought the July employment report supported the case for a rate hike as early as September.

"A very solid employment report. Job growth was well distributed and upward wage pressure, albeit mild, is a good sign after recent paltry performance by other indicators," said Jay Morelock, an economist at FTN Financial, in a note.

"It is important not to confuse solid with robust, however. Holding steady at a 38-year low, the labor force participation rate cannot be dismissed as a structural reaction to aging baby boomers; it is a clear indication that labor market slack is still prevalent," he added.

On Thursday, U.S. stocks suffered big losses as investors considered initial jobless claims and corporate earnings reports, with the Dow logging a six-session losing streak. Endite