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Wall St skids lower on jobs gloom
MARKETS-USA-STOCKS:Wall St skids lower on jobs gloom
By Burton Frierson
NEW YORK (Reuters) – U.S. stocks fell sharply on Friday after dismal jobs data heightened the impression the economy is stuck in a rut of slow growth.
News that the world’s largest economy created just 80,000 jobs in June – far fewer than needed to bring down the 8.2 percent unemployment rate – added to evidence that Europe’s debt crisis is weighing on global growth.
The report followed news this week that U.S. manufacturing shrank in June and the service sector growth slowed to its lowest level since January 2010, which might spur speculation the Federal Reserve will take more action to stimulate the economy.
Though Fed action might cheer some investors if it were to come, many are starting to doubt the ability of central banks to counter the economic gloom, while Friday’s number also might not be bad enough to prompt action.
“You can imagine the employment number isn’t very helpful today,” said Brian Battle, director of trading at Performance Trust Capital Partners in Chicago.
“Sub-100,000 is a very bad headline job growth number and the unemployment rate of 8.2, unchanged, isn’t very great. All those things conspire to give us very little confidence in recovery.”
The selling on Wall Street left the S&P 500 on track for losses of about 0.7 percent on the week. At current levels it would also be the worst week in just over a month.
On the day, the Dow Jones industrial average was down 155.19 points, or 1.20 percent, at 12,741.48. The Standard & Poor’s 500 Index was down 14.90 points, or 1.09 percent, at 1,352.68. The Nasdaq Composite Index was down 42.99 points, or 1.44 percent, at 2,933.13.
Spanish government bonds rose back to levels seen as unsustainable a day after the European Central Bank cut rates to a new record low and China and Britain also loosened monetary policy.
Shares of Informatica Corp plunged as much as 35 percent after the data-integration software maker forecast a weak second quarter hurt by delayed contracts.
Informatica was last trading down 29.7 percent at $30.48.
Networking shares took a hit after gear maker Acme Packet Inc
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