Stocks Open Lower After Jobs Report

Stocks plunged at the opening bell after the sharpest jump in the unemployment rate in more than 20 years.

The Dow Jones Industrial Average fell more than 100 points, or 1 percent, in the first minute of trading, and was up more than 150 points by 10 a.m. ET. Oil jumped more than $6 a barrel.

U.S. employers cut jobs for a fifth straight month. Nonfarm payrolls shed 49,000 jobsin May, better than the 58,000-decline expected. April was revise to show 8,000 more job losses than previously expected. The unemployment rate shot up to 5.5 percent from 5 percent in April, the biggest monthly jump since 1986.

“I’ve been trading these markets for 25 years; to see a jump like this is a little scary,” Jack Bouroudjian of Brewer Investment Group told CNBC. "But, these markets have already factored in that weakness.”

The market's initial knee-jerk was a sharp sell-off but economists pointed out that the historically high jump in the unemployment rate was likely a statistical fluke.

"These figures should be taken with a grain of salt as school-leavers probably skewed them this month," Joshua Shapiro, chief U.S. economist at MFR Inc. wrote in a note to clients.

In addition to new graduates, there was also historically high unemployment among teenagers, notes Tony Crescenzi of Miller Tabak. The increase in both demographics "almost certainly reflects difficulties adjusting for the many variables associated with the ending of the school year, changing demographics, and the timing of the jobs survey, Crescenzi said. "It is therefore likely that some of the month's increase in the unemployment rate will be reversed."

Still, the report "is further evidence of the increasing pressure on consumer spending, which is likely to revert to a very weak trend after the temporary benefit of tax rebates fades," Shapiro said.

Bouroudjian, meanwhile, is more worked up about comments Thursday from European Central Bank resident Jean-Claude Trichet that the central bank may raise a key European interest rate at its next meeting in July to tame inflation.

"Trichet’s comments -- these arrogant comments -- were unbelievable," Bouroudjian said. "He is not moving the ball, he is creating a new game."

Trichet's warning shot continued to depress the dollar and fuel another relentless ascent in oil prices , which shot up $6 a barrel to more than $134 a barrel.

In the financial sector, the Securities and Exchange Commission is investigating whether American International Group overstated the value of contracts linked to subprime mortgages, people familiar with the matter told the Wall Street Journal.

Executives at Lehman Brothers are weighing whether to pre-announce the firm's second-quarter results in an effort to dispel market rumors that it is facing a liquidity crisis, people close to the investment bank told CNBC.

Lehman has traditionally released its earnings for the second quarter during the week of June 16, which is in two weeks. But people close to the company said executives are considering whether to move those earnings up, possibly to next week.

And UBS is considering whether to divulge the names of up to 20,000 of its affluent American clients under pressure from an investigation on tax evasion, the New York Times reported.

Federal investigators believe some of the clients may have used offshore accounts at UBS to hide as much as $20 billion in assets from the Internal Revenue Service, the paper said.

Still to Come:

FRIDAY: consumer credit; Fed's Evans, Bullard speak; Wal-Mart shareholders meeting

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