* U.S. unemployment rate falls, but payrolls disappoint
* LinkedIn, AIG shares rise after results
* Dell committee and buyout group announce agreement, shares
* Indexes down: Dow 0.2 pct, S&P 0.2 pct, Nasdaq 0.1 pct
By Alison Griswold
NEW YORK, Aug 2 (Reuters) - Stocks on Wall Street edged
lower on Friday after data showed U.S. hiring slowed in July but
the jobless rate fell, mixed signals that could make the Federal
Reserve more cautious about scaling back its massive economic
The Dow and the S&P 500 pulled back from the record closing
highs they hit on Thursday after the key jobs report showed
non-farm payrolls rose by 162,000 in July, below expectations,
but the unemployment rate fell to 7.4 percent, its lowest
reading since December 2008.
Coming off a string of better-than-expected data and
optimism about strong growth in the second half of the year,
analysts described the tepid jobs report as a reality check.
"Stock investors are scared of both the tapering and a
potentially slowing economy," said Brian Reynolds, chief market
strategist at Rosenblatt Securities in New York. "They're not
sure what they're scared of, but they know they're scared. And
very few people want to buy stocks at an all-time high."
The Fed's support has been a pillar of the recovery from the
deepest recession since the Great Depression. The central bank
has reiterated that it will continue to stimulate the economy
until it is capable of standing on its own, reassurances that
helped the S&P 500 post its strongest day in three weeks on
Thursday and close above the 1,700 level for the first.
Five of the 10 S&P 500 industry sectors moved lower on
Friday, led by losses of more than 1 percent in the energy index
Chevron, the second-largest U.S. oil company, was
the biggest drag on the S&P 500 after posting a
steeper-than-expected 26 percent drop in quarterly profit.
Shares of the company fell 2.3 percent to $123.59.
The Dow Jones Industrial Average declined 27.74
points, or 0.18 percent, to 15,600.28. The Standard & Poor's 500
Index dropped 2.51 points, or 0.15 percent, to 1,704.36.
The Nasdaq Composite Index edged down 1.85 points, or
0.05 percent, to 3,673.89.
Time Warner Cable fell 2.3 percent to $114.97 after
Bloomberg reported that Cox Communications Inc has held talks
about merging with cable provider and rival Charter
Communications Inc. Charter added 4.4 percent to
Dell's special committee and a group led by founder
and chief executive Michael Dell announced a deal that
dramatically increases the chances of his $24.6 billion buyout
going through. Dell shares gained 5.3 percent to $13.64.
LinkedIn shares jumped 11.5 percent to $237.15 and
several brokerages raised their price targets on the stock after
results on Thursday topped expectations.
AIG Inc also beat expectations on Thursday and
announced its first capital return since its 2008 bailout
through a dividend and share buyback, sending its shares up 2
percent to $48.02.
Of the 391 companies in the S&P 500 that have reported
earnings for the second quarter, 67.8 percent have topped
analyst expectations, in line with the average beat over the
past four quarters, data from Thomson Reuters showed. About 55
percent have reported revenue above estimates, more than in the
past four quarters but below the historical average.
Consumer spending increased in June and inflation pushed
higher, while new orders for U.S. factory goods rose for the
third straight month in June.