Wall Street: Stocks plunge after job growth disappoints
NEW YORK • Stocks dropped sharply on Wall Street Friday after the government reported that U.S. employers added the fewest jobs in nine months in March and more people gave up looking for work. The report was worse than economists were expecting.
The Dow Jones industrial average fell 119 points to 14,485 as of 10:57 a.m. EDT. It was down as much as 171 points in the early going. It was the worst drop for the Dow since Feb. 25.
U.S. employers added 88,000 jobs in March, according to the Labor Department's monthly survey. That's half the pace of the previous six months, when an average of 196,000 jobs were added each month. It was a disappointment for markets following positive signs on housing and the job market over the winter.
The report, one of the most closely watched indicators of the economy, dented investors' confidence that the U.S. was poised for a sustained recovery. The stock market has surged this year, pushing the Dow and the S&P 500 to record levels. The Dow closed at an all-time high on Tuesday and is still up 10 percent this year.
"Things are still looking decent, but there's no doubt that this was a bit of disappointment," said Brad Sorensen, Charles Schwab's director of market and sector research. "We're watching to see is this the start of another soft patch."
In other trading, the Standard & Poor's 500 index fell 14 points, or 0.9percent, to 1,545. All 10 industry groups in the index fell, led by a 1.5 percent drop in the information technology group. Cisco Systems fell 91 cents, or 4.4 percent, to $20.13. Oracle dropped 53 cents, or 1.6 percent, to $31.84.
Investors were reducing their exposure to risk. The industry that held up the best was utilities, with a decline of just 0.1 percent. The rich dividends and stable earnings provided by those companies make them attractive to investors who want to play it safe.
The yield on the 10-year Treasury note, which moves inversely to its price, plunged from 1.76 percent to 1.70 percent, its lowest level since December. The benchmark rate has declined sharply over the last month, from 2.06 percent on March 11, as demand for low-risk assets increased amid mounting evidence that growth in the U.S. economy is slowing.
The Nasdaq composite, which includes many technology companies, fell 37 points, or 1.2 percent, to 3,187. That's worse than the declines of 0.8 percent in the Dow and 0.9 percent in the S&P.
F5 Networks, a network equipment and service provider based in Seattle, plunged 19 percent, the most of any S&P stock, after slashing its profit and revenue forecast. The company said its contract bookings fell sharply, as did its business with the federal government. The stock lost $17.28 to $73.14.
The S&P 500 is down 1.7 percent on the week and is on track for its biggest weekly loss since Nov. 9, when stocks fell after the Presidential election. Investors were worried that a divided government would fail to reach a budget agreement to avoid drastic tax hikes.