A poor US jobs market reading and an IMF warning over the global economy sent US stocks tumbling Friday.
Stocks sensitive to global growth took a pounding, with Alcoa down 2.2 per cent, Caterpillar down 2.6 percent, and Hewlett-Packard off 3.5 percent.
At the close of trade the Dow Jones Industrial Average was down 124.20 points (0.96 percent) to 12,772.47. The S&P 500 lost 12.90 (0.94 percent) to 1,354.68, while the tech-rich Nasdaq dropped 38.79 points (1.30 percent) to 2,937.33.
The Labor Department said the economy generated only a net 80,000 new jobs in June, leaving the unemployment rate at 8.2 percent. That put the average for the second quarter at 75,000 jobs per month, a bad
sign for US growth and consumer spending.
“At this pace, job creation is not fast enough to lower the unemployment rate with the labor force growing at close to 150,000 per month on average,” said John Ryding and Conrad DeQuadros at RDQ Economics.
The news came on the heels of International Monetary Fund chief Christine Lagarde saying that the fund would be cutting its global growth forecasts later this month.
“And that is predicated on the right set of actions being taken in Europe in order to avoid very significant deterioration and to eliminate major threats,” she warned.
Yahoo! shares were down 0.4 percent to $15.78 despite rumors throughout the day — confirmed after the market closed — that it and Facebook agreed on a new advertising partnership and would settle their legal battle over patents.
Facebook shares gained 0.8 percent to $31.73. On the Nasdaq, Apple lost 0.7 percent, Google gave up 1.7 percent and Amazon slipped 0.9 percent.
Bond prices surged. The yield on the 10-year Treasury fell to 1.54 percent from 1.60 percent Thursday, while the 30-year yield moved to 2.66 percent from 2.72 percent.
Bond prices and yields move in opposite directions.