US stocks resume downward slide
Stocks have resumed their downward slide as better than expected US jobs figures failed to erase fears over weak growth in the world's biggest economy and Europe's debt crisis.
The monthly US jobs data triggered a short-lived rally in European and US markets before major stock indexes started dropping again, adding to some of the worst losses since the collapse of US investment bank Lehman Brothers in 2008.
The US government reported that some 117,000 jobs were created in July and that the unemployment rate inched down to 9.1% from 9.2% in June. But while better than most analyst expectations, the rate of job growth was still far too low for a healthy economy and could not alleviate concern that the US may fall back into recession.
"The payrolls delivered a shot of adrenalin to the markets, but that's all it was, a short-term respite while the sell-off continues," said David Jones, chief market strategist at IG Index.
In the US, the Dow Jones industrial average dropped 0.9% to 11,287, while the broader Standard & Poor's 500 index fell 1.2% to 1,185.
The protracted debate about raising the debt ceiling in the US and confusion about Europe's strategy to fight its worsening debt crisis have undermined confidence in policy makers' willingness and ability to finally draw a line under the financial troubles that have plagued the Western world for four years.
Disagreements in the US Congress, meanwhile, are set to herald more struggles about budget cuts at a time when many economists are calling for economic stimulus. Oil prices fell in line with the general gloominess in the markets, since a weak economy hurts demand for energy. Crude fell 1.51 dollars to 85.12 dollars.
Earlier in Asia, Japan's Nikkei 225 stock average slid 3.7 % to 9,299.88 and Hong Kong's Hang Seng dived 4.3% to 20,946.14. China's Shanghai Composite Index lost 2. 2% to 2,626.42.
Japanese stocks were further weighed down by a further export-sapping appreciation in the yen despite Thursday's intervention in the markets by the Japanese government to weaken the currency. Finance Minister Yoshihiko Noda said authorities acted to protect the economic recovery following the March 11 earthquake and tsunami.
The dollar was 1 % lower at 78.42 yen. On Thursday, it spiked above 80 yen following the intervention, which was prompted by Monday's slide to 76.29 yen.