A jobs report showing that 117,000 new jobs were created last month has apparently confused the stock market.

Hiring picked up slightly in July and the unemployment rate dipped to 9.1 percent, an optimistic sign after the worst day on Wall Street in nearly three years.

Employers added 117,000 jobs last month, the Labor Department said Friday. That's better than the past two months, which were also revised higher.

The good news is that 117,000 jobs is slightly better than the 100,000 that were expected and that the unemployment rate dropped to 9.1%. On this news, the stock market opened up 150 points.

However, within half an hour that initial gain had been completely wiped out and the market was down 50 points amounting to another 200 point loss in the space of half an hour.

This was probably due to the realization that while 117,000 jobs was better than expected, it's far less than the number of jobs necessary to just keep up with the potential labor market. It was also probably due to the fact that the decrease in unemployment from 9.2% to 9.1% was a result of people giving up and leaving the labor market.

The unemployment report wasn't good news so much as it was not as bad as may have been feared. Unfortunately, less-bad-than-expected has become sufficient for temporary surges in the market until the realization hits that "not as bad" is not the same as "good."

In this context the market has started the morning bouncing from slightly above to slightly below yesterday's close.

Given the economic headwinds and negative momentum the markets are facing, it wouldn't be at all surprising to see the week close with another down day on Wall Street.