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Dismal job market pushes Dow into 275-point plunge
“The weaker jobs report translates into anticipation of slower growth ahead and weaker corporate earnings, and that ratchets stock prices lower,” Salamone said.
The record-low yield on the 10-year Treasury note reflected rapid buying by traders with the biggest portfolios, including central banks, endowments and pension funds, said Ira Jersey, U.S. interest rate strategist at Credit Suisse. He said money managers were selling investments priced in euros and stashing their money in U.S. securities.
Several analysts raised the possibility that the weakening economy will prompt more action by governments and central banks seeking to juice global economic activity. Anticipation of some policy response prevented even deeper losses, Stovall said.
The Federal Reserve undertook programs in 2009 and 2010 to buy U.S. government bonds. Its goal was to lower interest rates and encourage people to buy riskier investments like stocks. At least in public, the central bank so far has resisted a third round of purchases, known as quantitative easing.
Anticipation of bond-buying by the Fed “might put in a little bit of a floor to the market, but the overall economic picture is still bad,” said Bob Gelfond, CEO of MQS Asset Management, a New York hedge fund.
The dollar fell and gold rose partly because traders expect more intervention by the Federal Reserve, Gelfond said.
The euro rose half a penny against the dollar to above $1.24. A day earlier, fears about Europe’s finances had pushed the euro to a nearly two-year low against the dollar.
Only 17 of the 500 companies in the S&P index were higher for the day.
Homebuilder stocks fell the most, despite a report that construction spending rose for a second month in April. PulteGroup fell 11.8 percent, D.R. Horton 8.4 percent and Lennar 8.3 percent.
Boeing, the biggest U.S. exporter, fell 3.4 percent, one of the steepest declines among the 30 companies that make up the Dow. Traders fear that the economic slowdown will hurt global demand for its airplanes and defense technologies.
A slower global economy would reduce demand for energy. The price of a barrel of oil fell $3.49 to $83.04, extending a monthlong slide. The price of oil is at a 16-month low.
Stocks closed way down in Europe. Greece’s benchmark stock index fell 4.4 percent, Germany’s 3.4 percent and France’s 2.2 percent.
By Tom Fitton
New photos confirm the attack's coordination and its cover-up
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