Sunday, September 4, 2011

Wall St slides after zero jobs growth (Reuters)

NEW YORK (Reuters) ? Wall Street stocks dropped on Friday, with major indexes falling as much as 2 percent as Labor Department data showed jobs growth flatlined in August, intensifying worries the economy is staggering.

Financial, manufacturer and energy stocks suffered the biggest losses as declining issues far outweighed winners.

Nonfarm payrolls generated no new jobs last month as sagging consumer confidence discouraged already skittish businesses from hiring, keeping pressure on the U.S. Federal Reserve to provide more monetary stimulus to the economy.

"In a nutshell, this is the great goose egg economy, a big zero, a big nothing, and this better be one hell of a speech next week," Sal Arnuk, co-manager of trading at Themis Trading in Chatham, New Jersey.

U.S. President Barack Obama, in a speech set for September 8, will unveil a jobs program he hopes will provide "meaningful" tax relief and help the nation's long-term unemployed, a top aide told Reuters Insider.

"What the market is looking for this time, realizing that unemployment is a barrier, and until the federal government wakes up and realizes what the restraints are and designs a program attacking restraints, it's not going to make much progress," said Fred Dickson, chief market strategist at D.A. Davidson & Co in Lake Oswego, Oregon.

The Dow Jones industrial average dropped 170.66 points, or 1.48 percent, to 11,322.91. The Standard & Poor's 500 Index fell 20.06 points, or 1.67 percent, to 1,184.36. The Nasdaq Composite Index lost 40.47 points, or 1.59 percent, to 2,505.57.

The CBOE Volatility index, also known as the Wall Street fear gauge. rose 3.1 percent.

Stocks had risen recently on hopes the Fed would introduce new stimulus after data reflected a weak economy, recouping 50 percent of the down move from a July high. However, some analysts said the Fed may be running out of bullets in its fight to stimulate the economy.

Losing stocks outnumbered winners on the New York Stock Exchange by about five-to-one, while on the Nasdaq, decliners beat advancers by four-to-one.

Energy shares dropped as U.S. crude futures fell 2 percent on concerns economic weakness could curb fuel demand. Chevron Corp dipped nearly 2 percent to $96.68, while the PHLX Oil service sector index declined 2.3 percent.

Bank shares also fell, with the KBW banks index off 3.4 percent. A U.S. regulator is suing big lenders like Bank of America Corp, JPMorgan Chase & Co and Goldman Sachs Group Inc over mortgage practices.

Bank of America fell 6.6 percent to $7.39, JPMorgan lost 4 percent to $34.83 and Goldman stumbled 4.8 percent to $106.83.

The S&P capital goods index slid 2.5 percent.

Volume was light, with about 3.11 billion shares traded on the NYSE, NYSE Amex and Nasdaq ahead of the U.S. Labor Day holiday weekend.

(Editing by Jeffrey Benkoe)

Source: http://us.rd.yahoo.com/dailynews/rss/stocks/*http%3A//news.yahoo.com/s/nm/20110902/bs_nm/us_markets_stocks

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