Wall Street falls on job losses, Chevron, techs

NEW YORK (Reuters) - Stocks fell on Friday after government data showed the labor market deteriorated further in December, raising investor concerns about the outlook for profits and a deepening recession.

Payrolls were cut slightly less than expected, but the U.S. jobless rate climbed to its highest in nearly 16 years, pressuring already weak consumer spending.

Energy shares fell after CHEVRON (CVX.NY)Corp joined a growing list of bellwether companies warning about their profit outlooks. Its stock slid as much as 1.2 percent and was off 0.75 percent in midafternoon trading.

Technology shares also took a beating, causing the Nasdaq to briefly wipe out its 2009 gains, led lower by shares of Apple Inc , off 1.45 percent. Cisco Systems slid over 4 percent.

Rambus shares fell as much as 40 percent, its biggest slide since becoming a public company in 1997, after a judge ruled against the company in a patent case with rival Micron Technologies .

"The newsflow isn't going to be good," said Kevin Kruszenski, head of Listed Trading at KeyBanc Capital Markets in Cleveland. "There is still a lot of bad news in housing and employment.

"While the credit situation is beginning to thaw, we're still a sick patient."

The Dow Jones industrial average <.DJI> was down 92.47 points, or 1.06 percent, to 8,649.99. The Standard & Poor's 500 Index <.SPX> fell 12.81 points, or 1.41 percent, to 896.92. The Nasdaq Composite Index <.IXIC> stumbled 31.39 points, or 1.94 percent, to 1,585.62.

Thus far in 2009, the Dow is off 1.6 percent, while the S&P 500 is down about 1 percent.

The sell-off caused the benchmark S&P 500 to trim its advance since its November 21 intraday bear-market low to about 19 percent.

Employers slashed 524,000 jobs from their payrolls in December, less than the 550,000 seen in a Reuters poll, bringing the total job losses for 2008 to 2.6 million, the most since 1945.

Underscoring the weak labor market was news that Boeing would cut 4,500 workers in its commercial airplane unit this year, representing about 7 percent of the unit total.

When warning about its outlook, Chevron, a Dow component and the second-largest U.S. oil and gas company, cited the impact of lower energy prices on its exploration and production business.

Chevron shares fell to $73.46, while those of rival Exxon Mobil Corp declined 0.54 percent to $78.66. On Nasdaq, shares of Apple, the maker of the iPhone, dropped as much as 1.7 percent to $91.15. The semiconductor index <.SOXX> was off nearly 3 percent.

U.S. President-elect Barack Obama cited the faltering jobs market as a reason in his push for a new stimulus plan set to include tax cuts and major public works spending that could total nearly $800 billion.

Rambus shares tumbled after a U.S. District Court ruled on Friday that the company destroyed documents in a court case and therefore may not enforce patents against memory chip maker Micron Tech .

Shares of the chip interface maker dropped 36 percent to $11.76 while Micron slid 2.3 percent to $3.33.

Another standout on the day was a plunge in the shares of Lennar Corp , the second-largest U.S. home builder, after a letter questioning a late 1990s transaction involving the company surfaced on the Internet.

The letter to the FBI and other authorities from California pastor Barry Minkow, who served time in jail for stock fraud, concerned a joint venture between Lennar and a private developer to build a high-end housing project and golf course in California.

However, the stock pared losses after the company responded that Minkow had acted as an agent for a disgruntled litigant and posted false and inflammatory accusations against the company.

Lennar was off 11.8 percent at $10.07 after dropping more than 20 percent earlier in the session. The Dow Jones home construction index <.DJUSHB> fell 2.24 percent.

(Editing by Dan Grebler)