USA: Wall Street slammed on dissapointing jobs numbers and new worries about European debt crisis

Record ID: 186965

  • Title: USA: Wall Street slammed on dissapointing jobs numbers and new worries about European debt crisis
  • Date: 5th June 2010
  • Summary: NEW YORK CITY, NEW YORK, UNITED STATES (JUNE 04, 2010) (REUTERS) (SOUNDBITE) (English) STEPHEN WOOD, CHIEF MARKET STRATEGIST RUSSELL INVESTMENTS SAYING "I think what you are seeing is a global growth story that's real, that's measurable but it's not very strong, it's certainly not brisk. It's been led by the United States, it's been in a very lurching fashion. So I think the jobs figure plays into stabilization, the labor markets they are stabilizing, but they are not getting a lot better quickly."
  • Embargoed: 20th June 2010 13:00
  • Keywords:
  • Location: Usa
  • Country: USA
  • Topics: Finance
  • Reuters ID: LVA461BLFC05J4YS0G47S3FWC6WH
  • Story Text: Wall Street plunges on disappointing jobs numbers and worries about on-going European debt crisis closing at its lowest level since February.
    U.S. stocks cascaded to their lowest close since February on Friday (June 04) after May's jobs figure slammed investors already reeling from worry over another developing debt crisis, this time in Hungary.
    Data showed the U.S. economy added fewer-than-expected jobs last month, with a large portion of those being temporary hirings for the U.S. Census. Investors rapidly reversed bets made during the week as expectations for a blowout number grew, leading up to the report.
    Wall Street, which is down 12.5 percent since the April 23 closing high for the year, sold off broadly, led by economically sensitive sectors, including industrials, technology and small-caps, on concerns that the economy will recover by fits and starts.
    "I think what you are seeing is a global growth story that's real, that's measurable but it's not very strong, it's certainly not brisk," said Stephen Wood, Chief Market Strategist of Russell Investments.
    "It's been led by the United States, it's been in a very lurching fashion. So I think the jobs figure plays into stabilization, the labor markets they are stabilizing, but they are not getting a lot better quickly," Wood added.
    The drop in stocks follows Wall Street's first back-to-back advances since late April. Worries that Europe's sovereign debt troubles could spread flared again after a Hungarian official said the country was at risk of a Greek-style crisis, driving the euro to a more than four-year low against the dollar.
    The Dow Jones industrial average dropped 323.31 points, or 3.15 percent, to 9,931.97. The Standard & Poor's 500 Index lost 37.95 points, or 3.44 percent, to 1,064.88. The Nasdaq Composite Index tumbled 83.86 points, or 3.64 percent, to 2,219.17.
    The CBOE Volatility Index or VIX, Wall Street's favorite barometer of investor fear, shot up 20.43 percent to 35.48.
    Large manufacturers were among the Dow's biggest losers, with manufacturer Caterpillar Inc sliding 5.5 percent to $57.76 (USD), and conglomerate United Technologies Corp dropping 4 percent to $65.13.
    BP Plc avoided a decision on whether to pay its next quarterly dividend as it faced heavy political pressure to put the payout on hold while it fights the oil spill in the Gulf of Mexico. BP's U.S.-listed shares fell 4.4 percent to $37.53.
    For the week, the Dow lost 2 percent, the S&P 500 fell 2.3 percent, and the Nasdaq shed 1.7 percent.
    Financial stocks also ranked among the worst performers, with the KBW Banks index down 4.4 percent. JPMorgan Chase & Co slid 3.5 percent to $37.75, while Bank of America Corp fell 2.9 percent to $15.35.
    Decliners carried the day handily, outnumbering advancers on the New York Stock Exchange by a ratio of more than 9 to 1, while on the Nasdaq, nearly eight stocks fell for every one that rose.
    Further exacerbating the pressure on Wall Street were concerns from Europe about Societe Generale's derivatives business. The company said it would not comment on market talk about the bank's derivatives operations.
    The Labor Department said the U.S. economy added 431,000 jobs in May -- far short of the 513,000 that Wall Street had expected. The unemployment rate dropped to 9.7 percent in May from 9.9 percent in April.
    Even so, analysts said it didn't alter their view that the economy is stabilizing, although gradually, with many expecting unemployment will remain high for some time.
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