Wall Street sinks on labor market jitters, economy
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Thu, 04 Sep 2008 15:26:42 GMT |
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By Ellis MnyanduNEW YORK (Reuters) - Stocks tumbled on Thursday, weighed down by signs of deterioration in the labor market and concern over the outlook for corporate profits.Labor market jitters were sparked by a weekly government report showing an unexpected jump in the number of filings for jobless benefits and by a report by ADP Employer Services showing U.S. private employers slashed 33,000 jobs in August.Top drags included shares of economic bellwethers such as Caterpillar Inc , down more than 5 percent, and Boeing , whose stock slid more than 4 percent after the plane maker's largest labor union said its members had rejected the company's contract offer and voted to strike."The job market has been just a slow drip of bad news," said John Augustine, chief investment strategist at Fifth Third Asset Management in Cincinnati, Ohio."That's better than an open faucet, but it's still bad news for the economy. The stock market is struggling because it's waiting for better labor market news."The Dow Jones industrial average <.DJI> slid 232.94 points, or 2.02 percent, to 11,299.94. The Standard & Poor's 500 Index <.SPX> dropped 21.35 points, or 1.67 percent, to 1,253.63. The Nasdaq Composite Index <.IXIC> declined 41.59 points, or 1.78 percent, to 2,292.14.A lower close will mark the fourth day of losses for both the Nasdaq and the S&P 500.The economic data was all the more unnerving for investors as it came just a day before the all-important release of the government's August non-farm payrolls report.Concern about the U.S. labor market and the broader economy were compounded by news showing that sluggish growth was also emerging abroad. Euro zone economic data point to a weakening in growth at midyear, ECB President Jean-Claude Trichet said.Shares of Caterpillar, the maker of bulldozers and excavators, and a major exporter, fell to $64.01 on the New York Stock Exchange, while Boeing shares dropped to $63.34.Shares of technology companies, seen most vulnerable due to extensive global exposure, fell. Shares of networking equipment maker Cisco Systems were a top drag on the S&P 500, with a drop of 4 percent at $22.38 on Nasdaq.BlackBerry devices maker Research In Motion was the top Nasdaq drag, falling more than 3 percent to $11.08. Shares of iPod and iPhone maker Apple dropped 1 percent to $165.24.The bleak economic news overshadowed a solid August sales report from Wal-Mart Stores , the world's largest retailer, whose stock rose 0.8 percent to $60.24.(Additional reporting by Steven Johnson; Editing by James Dalgleish)
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