NEW YORK (AP) —
Stocks plunged Friday after the government reported that hiring slowed
sharply last month. The report confirmed investors' fears that the U.S.
economic recovery may be faltering.
The losses in the market were
widespread. The Dow Jones industrial average lost 168 points and the
Nasdaq composite had its worst day since Nov. 9. Both the Nasdaq and the
Standard & Poor's 500 index closed out their worst weeks of the
year. The Dow had its second-worst.
The dollar and U.S. Treasury
prices rose as investors dumped risky assets and moved money into
lower-risk investments. Energy stocks were among the hardest hit after
the price of oil fell below $100 a barrel for the first time since
February. Only one of the 10 industry groups in the S&P 500 rose,
utilities, which investors tend to buy when they're nervous about the
economy.
"The jobs numbers were a disappointment," said Phil Orlando, chief equity strategist at Federated Investors.
It
was the third straight daily loss for the Dow, but it's too early to
know if it's the start of a correction in the market. Even after its 1.4
percent decline this week, the Dow is still up 6.7 percent this year.
Investors
are on edge about Europe once again as France and Greece both hold
elections over the weekend. In France the socialist candidate Francois
Hollande has a chance to unseat the incumbent Nicolas Sarkozy, who has
been at the forefront of fashioning Europe's efforts to prevent its
share currency from collapsing.
Crude oil plunged $4 to $98.49 a
barrel on worries that demand would drop because of a weakening world
economy. It was the first time oil has dropped below $100 since February
13.
The late slump in the week was a stark contrast to Monday,
when the Dow closed at its highest level in more than four years,
propelled by a report that showed a pickup in manufacturing. All that
became a distant memory after a slew of poor economic reports were
released the rest of the week.
On Thursday major retailers
including Costco and Macy's reported that April sales inched up less
that 1 percent, the worst performance since 2009. Thursday also brought
news that U.S. service companies expanded their business more slowly in
April.
The Dow closed down 168.32 points, or 1.3 percent, at
13,038. All 30 companies that make up the index fell, led by Bank of
America and Cisco.
The S&P 500 fell 22.47 points, or 1.6 percent, to 1,369, while the Nasdaq index fell 67.96 points, or 2.2 percent, to 2,956.
For the week, the S&P lost 2.4 percent, the Nasdaq 3.7 percent.
The
yield on the benchmark 10-year Treasury note dropped to 1.88 percent
from 1.92 percent late Thursday as demand increased for safe
investments. The yield hasn't settled that low since early February.
The
culprit for the distress in financial markets was a report from the
Labor Department Friday showing that U.S. job growth slumped in April
for a second straight month. The 115,000 jobs added in April and the
154,000 in March were down form an average of 252,000 a month from
December through February.
Orlando noted that the first few months
of the year were marked by a number of abnormal conditions including an
uncharacteristically warm January and February. That led to a spurt in
hiring which usually occurs in spring.
Retail sales and hiring
were also affected by an earlier Easter, which fell on April 8 this
year, 16 days earlier than last year. That pushed some retail sales
ahead to March, leaving April's numbers weaker than they might have
been. Retailers also blamed a late Mother's Day for pushing some sales
out of April and into May. Unusually warm weather in February and March
also pulled forward some sales that would have normally occurred in
April.
"The surge in hiring and spending that usually occurs in
March through April, occurred earlier in the year this year," said
Orlando. "We have to wait for economic numbers from May and June to get a
better idea of the underlying strength of this economy."
After
the price of oil fell, energy company stocks turned lower in response.
Southwestern Energy Co. fell 7 percent and Marathon Oil Corp. fell 3
percent.
In other trading:
— Warnaco Group Inc. dropped over
6 percent after the clothing maker lowered its 2012 forecast and said
that its first-quarter net income fell, hurt by the weak European
economy.
— Aon Corp. fell almost 6 percent after the insurance
broker reported first-quarter net income fell 3 percent due to higher
costs and unfavorable currency exchange rates.
— LinkedIn Corp.
rose 7 percent after announcing late Thursday that its first-quarter
profit more than doubled, topping expectations. The social networking
company also announced an acquisition.
— Tilly's Inc. climbed 8
percent in the clothing retailer's debut on the New York Stock Exchange.
Tilly's sells surf-inspired and casual West Coast-styled clothing and
accessories.
— Einstein Noah Restaurant Group Inc. soared 19
percent after the owner of bagel chain Noah's Bagels said it is
considering strategic alternatives, including a possible sale of the
company
.
Copyright 2012 The Associated Press.