U.S. MARKET AVERAGES

Disappointing employment report and earnings news sent stocks in the negative territory.

The Labor Department said that employers added 193,000 jobs in January, up from a 140,000 gain the prior month. The upswing in job creation signaled that the economy was off to a good start this year, but the upbeat data also raised concerns the Federal Reserve would keep raising interest rates. However, the job growth was less than the 250,000 rise forecast by economists, although the unemployment rate slipped to 4.7% from a previous 4.9% level.

Falling consumer confidence widened stocks' losses. The University of Michigan reported consumer sentiment index slid 2.2 points to 91.2 compared with expectations of a slight decrease to 93.1.

Disappointing earnings reports from Amazon.com Inc and appliance maker Maytag Corp also weighed on sentiment. Maytag posted a wider Q4 deficit on restructuring and impairment charges. Internet retailer Amazon.com posted 43% profit drop in Q4, missing estimates.The decline came despite higher sales as the company continues to invest heavily in technology and marketing. Fast-food chain Wendy's International Inc. reversed a year-ago loss of $1.25 a share to post a quarterly profit of25 cents a share, although sales at its flagship restaurants open at least a year fell for the first time in 18 years.

The Internet sector remained the most notable decliner on the session. Airline, computer hardware and gold stocks posted notable losses as well. The biotech sector declined, showing a loss of about 1.1%.

Energy stocks rebounded from early morning losses to trade near the unchanged mark. The oil service sector significantly improved, showing a gain of about 1%. The HMO sector also recovered from an early loss to move into positive territory.

Mylan Laboratories (MYL: chart) rallied 13% on earnings and guidance to hit a new 52-week high. Stratex Networks (STXN: chart) also moved to a fresh peak owing to strong earnings. BellSouth (BLS: chart) resumed an upward momentum, rising to a fresh peak.

Dow component Intel (INTC: chart) fell below a recent trading range to a new 52-week low. Fellow blue chip Johnson & Johnson (JNJ: chart) also extended its low. Movie Gallery (MOVI: chart) dropped sharply to reach a fresh low.

In midday trading, the Dow Jones industrial average fell 36.34, or 0.33%. The Standard & Poor's 500 index was down 4.20, or 0.33%, and the Nasdaq composite index dropped 17.63, or 0.77%.

Bonds recovered from an early decline, with the yield on the 10-year Treasury note falling to 4.55% from 4.56% late Wednesday, but the yield curve remained inverted as the two-year note pressed higher to 4.61%.

MOVERS AND SHAKERS

Clyco Genesys (GLGS: chart) voluntarily filed for Chapter 11 bankruptcy protection. The company said it eliminated over half its workforce to give it time to pursue strategic alternatives, including a possible sale of the company. The company’s shares dropped 67.9%.

OccuLogix Inc (RHEO: chart), biotechnology company, reported negative results of a phase III MIRA-1 trial of a proposed treatment for the dry form of age-related macular degeneration. The company said the MIRA-1 trial of its RHEO system missed its primary endpoint, failing to demonstrate a statistically significant difference between the treated group and the placebo control group. OccuLogix is in the process of evaluating the implications of the data on its application for marketing approval from the Food and Drug Administration. The stock tumbled 66.7%.

Ryder System Inc (R: chart), vehicle fleet management company, reported Q4 net income of $58.8 million, or 92 cents a share, compared with $62.6 million, or 96 cents a share in the year-earlier period on 13% sales growth. Income from continuing operations came to 93 cents a share, missing estimates by a penny. The company forecast 2006 earnings at $3.75 to $3.90 a share. The stock fell 4%.

Rackable Systems (RACK: chart), server and data storage company, reported Q4 net earnings of $7.31 million, or 32 cents a share, reversing from a net loss of $14.3 million, or $2.57 a share last year. There were 22.7 million shares outstanding in the fourth-quarter vs. 5.57 million a year ago. Quarterly revenue rose to $83.1 million from $23 million. Company’s shares jumped 19%.

ECONOMIC NEWS

The Department of Commerce release its report on factory orders in the month of December on Friday, showing that order growth came in slightly higher than expected.

The report showed that new orders for manufactured goods rose 1.1 percent in December following an upwardly revised increase of 3.3 percent in November. Economists had expected orders to increase 1.0 percent compared to the 2.5 percent increase originally reported for November.

The increase in factory orders came as new orders for manufactured durable goods rose 1.8 percent in December after rising 5.3 percent in November. The growth in durable goods orders was upwardly revised from the previously reported 1.3 percent growth.