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Stocks Slide as Jobs Rally Fizzles

Stocks retreated as an early rally triggered by an on-target payrolls number fizzled.

Employers clipped 651,000 jobsfrom nonfarm payrolls last month, on par with expectations, though the prior two months were revised to show many more jobs were lost than previously thought. The unemployment rate hit a 25-year high of 8.1 percent, much worse than expected.

Still to come, January’s consumer credit figures will be released at 3 pm.

The latest government rescue of American International Group was, in part, a bid to protect banks in Europe, Rep. Paul Kanjorski (D-Pa.) said. If AIG failed, it “would have precipitated the failure of the European banking system,” Kanjorski said.

AIG shares declined.

Other fiinancials gave up early gains, with Citigroup back around $1 and Bank of America flat.

Merrill Lynch has sued Deutsche Bank for what it calls a hiring “raid.” Merrill, now part of Bank of America lost its treasurer Eric Heaton and 11 bankers to the German rival.

And Citigroup is reportedly looking to sell its stake in Japanese online brokerMonex Group in an attempt to raise cash, according to Yomiuri newspaper.

Citi was a high-profile casualty of Thursday’s widespread stock-market declines. The once giant Wall Street bank ended Thursday just above $1 a share, marking an 85 percent fall in this year alone.

Wells Fargo shares held onto gainsafter the bank cut its dividend to five cents from 34 cents.

American Express continued to slide for a third straight day, briefly dropping below $10, after a pop earlier in the week amid hopes that the TALF plan will help ease the credit-card company's pain.

Shares of General Motors continued their decline off a Wall Street Journal report that the company is casting a more open mind toward the notion of a planned bankrutpcy.

Ford shares gave up early gains.

General Electric shares rebounded, moving back toward $7, after analysts at both Merrill Lynch and Bernstein Research said they don't see GE needing to sharply mark down assets from its finance arm anytime soon. Merrill also backed the company's assertion that it probably won't need to raise fresh capital.

In earnings news, H&R Block posted a higher quarterly profit which it attributed to a hike in fees for tax preparation. The profit of 20 cents per share easily beat analyst estimates of 9 cents.