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Dow hits four-month low on weak jobs report
AFP - Saturday, June 5
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Dow hits four-month low on weak jobs report
NEW YORK (AFP) - – US stocks plummeted Friday after disappointing US job figures fueled fears about the health of the economic recovery and concerns mounted about European public finances.
The Dow Jones Industrial Average tumbled 324.06 points (3.16 percent) to 9,931.22, finishing solidly below the psychologically sensitive 10,000 level.
It was the weakest close for the blue-chip index since February 8.
The tech-rich Nasdaq index dropped 83.86 points (3.64 percent) to 2,219.17.
And the S&P 500 index, a broad measure of the market, fell 37.95 points (3.44 percent) to 1,064.88.
"Continued fears stemming from Europe, a flight to safety in the US dollar and a May jobs report falling short of heightened expectations led to a sharp sell-off this session," Briefing.com analysts said in a note to clients.
The keenly anticipated Labor Department report showed the economy created 431,000 nonfarm jobs in May -- the vast majority due to temporary government hiring for this year's census.
Though it was the highest number in a decade, most experts had expected 500,000 payrolls would be added.
The private sector accounted for only 41,000 new jobs, less than a fifth of the consensus forecast.
The unemployment rate slipped to 9.7 percent from 9.9 percent in April as the labor force contracted.
"The May numbers are now a sobering reminder of the depth and severity of the labor market decline of the past two years and the lingering obstacles to growth," said Sophia Koropeckyj at Moody's Economy.com.
The US jobs report rocked European stock markets, adding to renewed concerns about eurozone public finances as Hungarian officials raised the prospect of a debt default.
The euro fell below 1.20 dollars for the first time since 2006.
Oil futures tumbled more than three dollars a barrel in New York and London.
On Wall Street, industrials, sensitive to the economic growth outlook, were hammered.
Alcoa dropped 4.66 percent to 10.84 dollars, Boeing shed 4.91 percent at 61.15 dollars and Caterpillar dived 5.48 percent to 57.76 dollars.
Credit-card firm American Express lost 5.25 percent at 38.41 dollars and conglomerate General Electric, considered an economic bellwether, slumped 4.50 percent to 15.71 dollars.
Product recalls contributed to the bearish sentiment.
McDonald's shares dropped 1.69 percent to 66.70 dollars. The fast-food titan recalled 12 million drinking glasses sold in the United States and 1.4 million glasses in Canada that promote the latest "Shrek" movie. The glasses were found to be tainted with cadmium, a toxic metal.
Pfizer fell 3.13 percent to 14.76 dollars after recalling intravenous drugs and products due to non-sterility that could be fatal.
The bond market leaped as investors sought relative safety in US Treasurys.
The yield on the 10-year US Treasury bond fell to 3.195 percent from 3.379 percent Thursday and that on the 30-year Treasury bond dropped to 4.119 percent from 4.288 percent. Bond yield and prices move in opposite directions.
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