- The Washington Times - Saturday, September 8, 2001

NEW YORK (AP) A worse-than-expected unemployment report ignited another dizzying sell-off yesterday, sending the Dow Jones industrials tumbling more than 230 points and the Standard & Poor's 500 index to its lowest level in nearly three years.

The Dow closed down 234.99, or 2.4 percent, at 9,605.85, its lowest close since April 4, but still 216 points above its weakest finish for the year.

The Standard & Poor's 500 index fell 20.62, or 1.9 percent, to 1,085.78, its weakest finish this year and lowest close since October 1998.

The Nasdaq Composite Index fell the least of the three major benchmarks but still recorded its worst close since April 4, down 17.94, or nearly 1.1 percent, at 1,687.70, about 49 points from its 2001 low point.

For the week, the Dow lost nearly 3.5 percent, the Nasdaq fell 6.5 percent and the S&P; dropped 4.2 percent. In the past two weeks, the Dow has tumbled nearly 8 percent, the Nasdaq has lost nearly 12 percent and the S&P; has fallen 8 percent.

The selling yesterday began early in the session when a Labor Department report showed the nation's unemployment rate had soared to 4.9 percent in August its highest level in nearly four years and businesses had cut 113,000 jobs as the slumping economy continued to hammer the labor market.

Investors punished retailers yesterday out of fear the slowdown would hurt consumer spending and confidence. Consumer spending accounts for two-thirds of the economy, and Wall Street is terrified that any decrease could put already fragile businesses in even worse positions.

Home Depot dropped $2.60, or 6 percent, to $40.95, while Wal-Mart lost $1.15 to $46.22.

"People are getting increasingly concerned that the consumer, who has held the economy up so far, will begin to retrench and the economy will lose what little momentum it has and this will turn into a recession," said Bob Barker, investment consultant at Dain Rauscher.

So far, the U.S. economy has managed to steer clear of a recession, commonly defined as two consecutive quarters of negative growth, though the nation's second-quarter GDP growth checked in at only 0.2 percent its slowest pace in eight years.

The pessimism spread to manufacturing and financial stocks. American Express slid 68 cents to $34.60 on fears a consumer and business slowdown would hurt the broader sector. And Boeing tumbled $3.66 or 7.5 percent to $45.18 after a Morgan Stanley analyst downgraded the airplane manufacturer citing slowing orders.

Even pharmaceutical issues, usually a favorite with Wall Street in uncertain times, were weak. Merck lost $1.45 to $64.30.

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