Stocks Suffer Year’s Worst Day on Jobs Report

Jun 1, 2012 4:17pm
ap Wall Street jt 120601 wblog Stocks Suffer Years Worst Day on Jobs Report

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After a dismal May jobs report, U.S. stocks had their worst day in 2012, erasing the gains for the year and touching lows for a number of benchmarks.

The S&P 500 index fell nearly 2.5 percent to 1,278 as the tech-heavy Nasdaq fell over 2.8 percent to 2,747. The Nasdaq had its worst start to June on a point basis ever.

The Dow Jones industrial average had its worst close since November 2011 and is now negative for the year. The Dow fell over 2.2 percent to 12,117.

Paul Larson, chief equities strategist with investment firm Morningstar, said while investor anxiety has sprung from a number of sources of late, today’s jobs report tipped the scales toward red.

The Labor Department reported the U.S. economy added 69,000 jobs in May, fewer than the 150,000 many economists had expected, and the unemployment rate rose to 8.2 percent.

Concern about Europe’s debt crisis and whether Greece will leave the euro zone currency union have clouded the U.S. economic recovery for the past several months.

“The market is on edge beacuse of that and today we find that the economic recovery here in the  United States while still progressing, is recovering quite anemically,” Larson said.

The S&P 500, which is up only 1.6 percent year to date, had its worst day of 2012. Its second worst day was April 10, when the index fell over 1.7 percent.

While the market’s day was disappointing, today still “pales in comparison” to the second half of last year. The S&P 500′s worst day in 2011 was on August 8 last year. That’s when the index dropped almost 6.6 percent.

“It was a bad day today, but in terms of market corrections this was relatively mild,” Laron said, adding that it was “a mild earthquake” and “not a tragic disaster.”

Mike Gibbs, co-head of Raymond James’ equity advisory group, said today’s trading was more worrisome.

He pointed to the fact that S&P 500 closed below its 200-day moving average, a common benchmark, which most recently was 1284.

The weak PMI manufacturing data from China and several European countries was caused concerns before the markets opened, then the U.S. jobs numbers “woefully missed.”

Trading volume was also high and showed “conviction on the part of the seller,” indicative of troubled investors.

“When market is already on fragile footing, with weak data and several things hitting market at one time, it was tough to hang on,” Gibbs said.

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