Wall St. sinks on labor market, global growth fears
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By Steven C. JohnsonNEW YORK (Reuters) - Stocks tumbled about 2 percent on Thursday, battered by more signs of weakness in the U.S. labor market and increasingly sluggish growth overseas, raising worries about the corporate profit outlook.The market hobbled out of the opening gate after weekly government data showed an unexpected jump in the number of filings for jobless benefits, while a report by ADP Employer Services showed private employers cut 33,000 jobs in August.Adding to the gloom, Terex Corp , a U.S. maker of construction and mining equipment, cut its 2008 sales and profit forecast, citing weak demand in Western Europe and North America, sending its shares down almost 20 percent to $38.05.Other top drags included economic bellwethers 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."It's definitely fear of an economic downturn that's hurting us today," said Jack Ablin, chief investment officer at Harris Private Bank in Chicago. "The economic data and the downbeat forecasts from management don't lend a lot of confidence to the economic revival outlook."The Dow Jones industrial average <.DJI> was down 234.65 points, or 2.03 percent, at 11,298.23. The Standard & Poor's 500 Index <.SPX> was down 24.27 points, or 1.90 percent, at 1,250.71. The Nasdaq Composite Index <.IXIC> was down 45.93 points, or 1.97 percent, at 2,287.80.A lower close would mark the fourth day of losses for both the Nasdaq and the S&P 500, and would be the worst four-day performance for both indexes in nearly three months.Generally lackluster August retail sales were another headwind for the market, as were concerns that sluggish growth was emerging abroad. The president of the European Central Bank, Jean-Claude Trichet, said euro zone data points to weakening growth at midyear.The U.S. labor market data, meanwhile, was especially unnerving for investors because it came a day before the all-important release of the government's August non-farm payrolls report."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. "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."Economists expect the government's labor report on Friday to show a decline of 75,000 jobs in August, which would be the eighth consecutive month of job losses in the United States.Shares of Caterpillar, the maker of bulldozers and excavators and a major exporter, fell to $64.07 on the New York Stock Exchange on Thursday, while Boeing shares dropped to $62.93. Although members of Boeing's largest labor union voted to strike, the union agreed to postpone a walkout for 48 hours to allow more time for negotiations.Shares of technology companies, considered vulnerable because of their exposure to global markets, fell. Networking equipment maker Cisco Systems was a top drag on the S&P 500, with a drop of 3.8 percent at $22.44 on Nasdaq.BlackBerry devices maker Research In Motion was the top Nasdaq drag, falling nearly 3.6 percent to $110.71. Shares of iPhone maker Apple dropped 1.2 percent to $165.07.(Additional reporting by Ellis Mnyandu; Editing by Leslie Adler)
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