Dismal jobs report sends Dow into 275-point dive

by
June 2, 2012

By DANIEL WAGNER, AP Business Writer

Alarmed by an ominously weak U.S. jobs report, investors ran for safety Friday from new worries about a global slowdown, sending the Dow Jones industrial average to its biggest loss since November.

The nearly 275-point dive wiped out the last of the index’s gains for the year.

Across Wall Street, fearful investors snapped up safer investments such as bonds, dragging the yield on the benchmark 10-year Treasury note to a record low. Gold spiked $50 an ounce, and oil fell 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.

The Standard & Poor’s 500 index and Nasdaq composite index both fell more than 2 percent. The Nasdaq has dropped more than 10 percent since its peak — what traders call a market correction. And 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 percent from 8.1 percent. 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 percent in April, and unemployment spiked to almost 25 percent in Spain.

There were signs that growth in China, which helped sustain the global economy through the recession, is slowing significantly. China’s manufacturing sector weakened in May, according to surveys released Friday.

The Dow closed down 274.88 points, or 2.2 percent, at 12,118.57. The Dow is off 0.8 percent for the year; two months ago, it was up more than 8 percent for the year.

The Standard & Poor’s 500 index fell 32.29 points, or 2.5 percent, to 1,278.04. The Nasdaq dropped 79.86, or 2.8 percent, to 2,747.48. Both indexes are still up for the year — 1.6 percent for the S&P 500 and 5.5 percent for the Nasdaq.

The yield on the benchmark 10-year U.S. Treasury note briefly fell to 1.44 percent, the lowest on record. It ended the day at 1.46 percent. Gold for August delivery climbed $57.90, nearly 4 percent, to $1,622.10 per ounce.

To read more, visit: http://www.google.com/hostednews/ap/article/ALeqM5hobI13hatXZ6n7btlvBkp1ch1LpQ?docId=6a072ae966ab457680953a6156abdbde

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