Despite more jobs, US markets fall anew
Source: Agencies |
August 6, 2011, Saturday
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Print Edition
Print Edition
EVEN a solid United States jobs report wasn't enough to calm financial markets.
The Dow Jones industrial average turned lower yesterday as traders focused on Europe's latest efforts to contain the region's debt crisis. The Dow had jumped as many as 171 points shortly after the opening bell on a report that US hiring picked up last month. But by midmorning it was down more than 100 points.
European leaders are calling emergency meetings and seeking to reassure markets that a large nation such as Italy or Spain won't become the latest country in the region to need a financial backstop.
The US economy added 117,000 new jobs in July, and hiring in May and June were not as bad as reported previously, the US Labor Department said.
The unemployment rate inched down to 9.1 percent from 9.2 percent, partly because some unemployed workers stopped looking for work. Health care providers and manufacturers added jobs.
More than 200,000 jobs must be created every month to rapidly reduce the unemployment rate, which has topped 9 percent in every month except two since the recession officially ended in June 2009. Many economists fear that the economy might dip back into recession.
The solid report failed to lift the spirits of traders a day after the Dow plunged 513 points in its worst day since October 2008.
In late morning trading, the Dow fell 117 points, or 1 percent, to 11,266. The Standard & Poor's 500 index fell 15, or 1.3 percent, to 1,184. The Nasdaq composite index fell 43, or 1.7 percent, to 2,512.
Italy's borrowing costs shot higher, escalating fears that Europe's fourth-biggest economy might need a bailout that the rest of the continent won't be able to afford. European leaders interrupted their vacations to consult on the debt crisis, seeking a way to keep the turmoil from pushing Spain and Italy into financial collapse.
Overseas markets also fell. In Europe, shares recovered some of their losses after plunging to their lowest levels in more than a year.
Thursday's sell-off was the Dow's ninth-worst day on record in terms of points lost, and it wiped out what was left of the index's gains for 2011. US markets have entered a correction, falling 10 percentage points from their highs this spring.
Traders have focused on a torrent of bad economic news since the US government struck a deal last weekend to raise the nation's borrowing limit, averting a debt default. Manufacturing and the service sector are barely growing. The economy expanded in the first half of this year at its slowest pace since the recession ended in June 2009.
The Dow Jones industrial average turned lower yesterday as traders focused on Europe's latest efforts to contain the region's debt crisis. The Dow had jumped as many as 171 points shortly after the opening bell on a report that US hiring picked up last month. But by midmorning it was down more than 100 points.
European leaders are calling emergency meetings and seeking to reassure markets that a large nation such as Italy or Spain won't become the latest country in the region to need a financial backstop.
The US economy added 117,000 new jobs in July, and hiring in May and June were not as bad as reported previously, the US Labor Department said.
The unemployment rate inched down to 9.1 percent from 9.2 percent, partly because some unemployed workers stopped looking for work. Health care providers and manufacturers added jobs.
More than 200,000 jobs must be created every month to rapidly reduce the unemployment rate, which has topped 9 percent in every month except two since the recession officially ended in June 2009. Many economists fear that the economy might dip back into recession.
The solid report failed to lift the spirits of traders a day after the Dow plunged 513 points in its worst day since October 2008.
In late morning trading, the Dow fell 117 points, or 1 percent, to 11,266. The Standard & Poor's 500 index fell 15, or 1.3 percent, to 1,184. The Nasdaq composite index fell 43, or 1.7 percent, to 2,512.
Italy's borrowing costs shot higher, escalating fears that Europe's fourth-biggest economy might need a bailout that the rest of the continent won't be able to afford. European leaders interrupted their vacations to consult on the debt crisis, seeking a way to keep the turmoil from pushing Spain and Italy into financial collapse.
Overseas markets also fell. In Europe, shares recovered some of their losses after plunging to their lowest levels in more than a year.
Thursday's sell-off was the Dow's ninth-worst day on record in terms of points lost, and it wiped out what was left of the index's gains for 2011. US markets have entered a correction, falling 10 percentage points from their highs this spring.
Traders have focused on a torrent of bad economic news since the US government struck a deal last weekend to raise the nation's borrowing limit, averting a debt default. Manufacturing and the service sector are barely growing. The economy expanded in the first half of this year at its slowest pace since the recession ended in June 2009.
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