By Whitney Kisling Jan. 8 (Bloomberg) -- U.S. stocks dropped, sending the Standard & Poor’s 500 Index down from a 15-month high, after an unexpected decrease in jobs spurred concern the economic recovery will falter. Boeing Co., Coca-Cola Co. and Kraft Foods Inc. declined at least 1.1 percent after the Labor Department said the nation lost 85,000 jobs in December, compared with the median economist forecast that called for no change. Goldman Sachs Group Inc., JPMorgan Chase & Co. and Morgan Stanley fell after Citigroup analysts reduced their fourth-quarter profit estimates, citing a “substantial decline” in trading. The S&P 500 slipped 0.4 percent to 1,136.93 at 9:40 a.m. in New York. The index had rallied 2.4 percent since Dec. 31, the best start to a year since 2006. The Dow Jones Industrial Average lost 42.93 points, or 0.4 percent, to 10,563.93. “The market is anticipating a very strong recovery,” said Tom Wirth, senior investment officer at Chemung Canal Trust Co., which manages about $1.7 billion in Elmira, New York. Today’s report on jobs “would put into question whether the economy is going to grow over the next couple quarters.” The S&P 500 dropped for the first time this week. Payrolls decreased last month after a November gain of 4,000, the Labor Department said. The jobless rate held at 10 percent. Less Trading Goldman Sachs, the most profitable firm in Wall Street history, lost 0.9 percent to $176, while Morgan Stanley fell 0.8 percent to $32.65 and JPMorgan retreated 0.9 percent to $44.40. Citigroup analysts said trading in bonds, commodities and currencies slumped during the fourth quarter, hurting profit at U.S. banks. U.S. equities climbed for a fourth day yesterday, sending the S&P 500 to a 15-month high, on easing concern over commercial real-estate losses and gains in holiday retail sales. The S&P 500 rallied 23 percent last year, including a rebound of 65 percent from a 12-year low in March, after governments around the world enacted stimulus measures and the Federal Reserve left its benchmark interest rate near zero to end the recession. The biggest annual rally in six years left the index trading at almost 25 times its companies’ reported earnings from continuing operations, the highest level since 2002, according to Bloomberg data. The combined profit of companies in the S&P 500 is expected to increase in the fourth quarter from the year-earlier period for the first time since the second quarter of 2007, ending a record nine straight periods of declines. Alcoa is slated to release results Jan. 11, the first company in the Dow average to report. S&P 500 profits increased 60 percent in the fourth quarter, according to analyst projections compiled by Bloomberg. The index’s price-to-earnings ratio falls to less than 15 when compared with estimated profit for 2010, according to Bloomberg data. To contact the reporter on this story: Whitney Kisling in New York at wkisling@bloomberg.net.

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