- posted 11 years ago
Stocks nosedive after jobs data
Market closes under 10,000 on report of sagging U.S. job growth, more
By Christine Hauser and Matthew Saltmarsh
New York Times
Posted: Saturday, Jun. 05, 2010
Concerns about the strength of the economic recovery in the United
States and new worries about the debt crisis in Europe sent stocks
sharply lower on Friday, with all the major indexes declining more than
The markets were sent skidding after the Labor Department's report on
job growth in May fell short of expectations. While the economy added
431,000 jobs, more than 90 percent of the new jobs were in government -
and most of them were temporary positions to help conduct the 2010
The Dow Jones industrial average closed below 10,000 for the third time
this year, ending at 9,931.22, down 324.06, or 3.2 percent. It was the
Dow's lowest close in almost four months. The euro also continued its
decline, dropping to less than $1.20 on concerns about the fiscal
troubles in Europe.
While the markets have been bedeviled for weeks by worries over debt
problems in Spain, Portugal and Greece, the boundaries of the problem
shifted to Hungary after its government sent worrying signals about its
finances. Investors fled the country's assets, and the euro slipped to
$1.1992 in afternoon trading in London, its lowest level since March
The currency was down from $1.2162 late Thursday, dented by the comments
from Hungary and from France, where Prime Minister François Fillon told
a news conference, according to a text released by his office, that he
only sees "good news in the parity between the euro and dollar" and that
he was not concerned by its decline.
"The jobless number and the payrolls are having a big impact on the
market, as well as the problems over in the euro zone," said Dan
Faretta, senior market strategist for LaSalle Futures Group. "They are
having issues of it spreading to other countries, and that brings about
a lot of worries for investors."
Few private-sector jobs
Employers added only 41,000 private-sector jobs in May. Those job gains
were limited mostly to the health care, mining and manufacturing
sectors. What had been a return to construction hiring proved
short-lived, as the sector shed jobs again.
While federal employment was up sharply because of the temporary hiring,
state and local governments shed 22,000 jobs in May, and that may be a
preview of things to come.
Private-sector hiring, which exceeded 218,000 jobs in April, fell
dramatically in May, and the recent stock-market slump seems to reflect
a growing view that the U.S. economy, while improving, won't grow fast
enough this year to knock down the jobless rate and move sharply into an
The nation's unemployment rate fell to 9.7 percent from 9.9 percent. The
Charlotte region's jobless rate dropped to 11.1 percent in April from
12.1 percent the month before.
The national jobless rate is expected to go back up over 10 percent
later this year as the economic recovery convinces more Americans to
resume looking for work - and be counted as unemployed rather than out
of the work force.