Stocks closed broadly lower Friday, hurt by a disappointing reading on job creation and a state court ruling that slammed banks' foreclosure practices.

The Dow Jones Industrial Average ($INDU) fell 23 points, or 0.2%, to finish at 11,675. Financial stocks J.P. Morgan Chase (JPM), Bank of America (BAC), American Express (AXP) and Travelers (TRV) weighed on the blue-chip index after the Massachusetts Supreme Judicial Court affirmed the fundamental and long-established idea that a bank must own the mortgage it's foreclosing on before it forecloses.

Because both Wells Fargo (WFC) and US Bancorp (USB) could not prove they owned the mortgages when they foreclosed on two homes, the court held that the foreclosures did not give the banks clear title to the properties.

The latest development in the foreclosure scandal led to a sell-off in the financial sector, which led the broader market lower. The S&P 500 ($INX) closed down 2 points, or 0.2%, at 1,272. The tech-heavy Nasdaq Composite ($COMPX) lost 7 points, or 0.3%, to finish at 2,703.

Jobs Growth Still Sluggish

Stocks started the day on a down note after December's employment report came in short of Wall Street's expectations. Nonfarm payrolls rose by 103,000 last month with the private sector adding 113,000 jobs and the government slashing 10,000 jobs, the Labor Department said. Economists were looking for 150,000 jobs to be created last month.

Expectations for the government's monthly employment situation report were running especially high after Wednesday's data from payroll processor ADP (ADP) showing a record 297,000 private jobs added last month, nearly triple Wall Street's forecast. And although the Labor Department's headline unemployment rate dropped to 9.4% from 9.7%, that was largely attributable to people giving up on trying to find a job.

Employment data dominated traders' thoughts all week, says Kenny Polcari, managing director at interdealer broker ICAP Corporates, and when Friday's figures finally came in they were something of a wash.

"The ADP number ignited some excitement coming into Friday, and that caused a number of analysts to raise their numbers," Polcari says. "So when it came in at 103,000, that was a bit of a letdown. But the November number was revised up, so the market kind of marked time."

For more on Polcari's take from the floor of the New York Stock Exchange (NYX), see the video above.

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surfr45

With ultra rich, evil man George Soros's corrupt puppets still in the white house and the senate does anyone think we are in for good times any time soon?

January 08 2011 at 8:00 AM Report abuse +1 rate up rate down Reply
bygbubba

What happened to the bond holders when GM went bankrupt? Think you owners of the Treasury Inflation-Protected Securities (TIPS) will be safe with these corrupt government officials in the white house and senate? You Democrats have been soooo gullible.

January 08 2011 at 7:37 AM Report abuse +3 rate up rate down Reply
bygbubba

We are on the way to destruction. Better load up on precious metals while they have had a slight pullback. I'm just saying, our country is being ripped apart at the seams. I know many are trusting in TIPS but do you really think they will be worth anything at all when they (our trusted government officials) just print the trillions of dollars to pay the debt off?

January 08 2011 at 7:33 AM Report abuse +3 rate up rate down Reply
Robert & Lisa

We are re-living the Jimmy Carter years, only no telling how much worse it's going to get. High unemployment, high commodity prices, high inflation and corrupt demoncrat politicians in the white house and senate being controlled from behind the scenes by the evil, ultra rich men like George Soros.

January 08 2011 at 7:02 AM Report abuse +4 rate up rate down Reply
pamelakuo08

The Refi Plus program will waive the normal credit score requirement for a refinance; it will have reduced documentation standards for proof of income; and it will allow for computer-based appraisals, which tend to inflate the value of a home and make it easier to qualify for a refinance. Search online for "123 Mortgage Refinance" they are the best and fast.

January 08 2011 at 2:10 AM Report abuse +1 rate up rate down Reply
husseinobama2011

obamas 3 trillion dollar stimu-less at irs best,,,,prepare people

January 07 2011 at 6:57 PM Report abuse +1 rate up rate down Reply
kristhegirl

The article right next to your headline states that the unemployment rate dropped to 9.4. . .lowest in 19 months. . .wrote this one before the numbers came out? Or too tired to make a correction? hard to take serious. . .

January 07 2011 at 6:06 PM Report abuse rate up rate down Reply
jkennedy806

I hope bank stocks drag the too big to fail crooks right to the devil. Don't own the Mortgage ??? Well who does?? Who owns your mortgage?

January 07 2011 at 5:13 PM Report abuse +1 rate up rate down Reply