Dow plunges amid US employment woes
The US stock market suffered its worst day of the year on Friday after a surprisingly weak report about hiring and employment cast a pall of gloom over the economy.
The Dow Jones industrial average plunged 275 points.
Traders stampeded into the safety of bonds, pushing the yield on the benchmark 10-year Treasury note to a record low. Fearful investors bought gold, causing the price to spike at nearly 60 dollars an ounce, and concern about a global economic slowdown drove the price of oil to its lowest since October.
"The big worry now is that this economic slowdown is widening and accelerating," said Sam Stovall, chief equity strategist at S&P Capital IQ, a market research firm. It was the Dow's steepest one-day drop since November.
The Standard & Poor's 500 index and Nasdaq composite index both fell by more than 3%. The Nasdaq has dropped more than 10% since its peak - what traders call a market correction. The S&P 500 is just a point above correction territory.
American employers added just 69,000 jobs in May, the fewest in a year, and the unemployment rate increased to 8.2% from 8.1%. Economists had forecast a gain of 158,000 jobs. The report, considered the most important economic indicator each month, also said that hiring in March and April was considerably weaker than originally thought.
Earlier data showed weak economic conditions in Europe and Asia, too. Unemployment in the 17 countries that use the euro currency stayed at a record-high 11% in April, and unemployment spiked to almost 25% in Spain.
There were signs that growth in China, which helped sustain the global economy through the recession, is slowing significantly. China's manufacturing weakened in May, according to surveys released Friday.
The Dow closed down 274.88 points, or 2.2% , at 12,118.57. The Dow is off 0.8% for the year; two months ago, it was up more than 8% for the year.
The Standard & Poor's 500 index fell 32.29 points, or 2.5%, to 1,278.04. The Nasdaq dropped 79.86, or 2.8%, to 2,747.48. Both indexes are still up for the year - 1.6% for the S&P 500 and 5.5% for the Nasdaq.