Oops: Dow Falls 200+ Points
Stocks fell sharply Friday after the release of a dismal report on job creation in the United States. The Dow Jones industrial average dropped more than 200 points, erasing what was left of its gain for the year.
The Standard & Poor’s 500 index and Nasdaq composite index both fell more than 1.5 percent in early trading.
American employers added just 69,000 jobs in May, the fewest in a year, and the unemployment rate ticked up to 8.2 percent from 8.1 percent. Economists had forecast a gain of 158,000 jobs.
A little more than an hour into trading, the Dow was down 215 points at 12,178, leaving it with a loss of 0.3 percent for the year. Earlier this year, the Dow was up more than 8 percent.
“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 weak jobs report sent traders stampeding into U.S. government bonds as a safe investment. Bond prices rose sharply, and the yield on the benchmark 10-year U.S. Treasury note fell to 1.46 percent, the lowest on record.
But the jobs report returned the United States to the flashpoint of market fear, said Todd Salamone, director of research for Schaeffer’s Investment Research in Cincinnati.
“The weaker jobs report translates into anticipation of slower growth ahead and weaker corporate earnings, and that ratchets stock prices lower,” Salamone said.