A roundup of trading on major world markets:
NEW YORK – A dismal jobs report has caused stocks to plunge in the US.
The Dow Jones industrial average dropped 253 points, or 2.2 per cent, wiping out its gain for the week. All 30 stocks in the average fell.
No jobs were added in the US last month, the government said on Friday. It was the worst employment report in 11 months and renewed fears that another recession could be on the way.
The yield on the 10-year Treasury note briefly fell below two per cent and gold jumped $US48 ($A44.81) an ounce as cash flowed into investments seen as less risky than stocks.
The US jobs news came out midday in Europe, dragging stock markets lower in afternoon trading. Indexes in Germany and France were already sinking on news that talks between Greece and international lenders over that country’s debt crisis were breaking down. Germany’s DAX closed down 3.4 per cent; France’s CAC-40 lost 3.6 per cent.
The lack of hiring in the US last month surprised investors. Economists were expecting 93,000 jobs to be added. Previously reported hiring figures for June and July were revised lower. The average work week declined and hourly earnings fell. The unemployment rate held steady at 9.1 per cent. The rate has been above nine per cent in all but two months since May 2009.
The Dow Jones industrial average lost 253.31 points to close at 11,240.26. It was the biggest fall in two weeks. The Dow gained 329 points in the first three days of the week, turning the index positive for the year on Wednesday. Its two-day drop of 373 on Thursday and Friday left it down 0.4 per cent for the week.
The Standard & Poor’s 500 index fell 30.45, or 2.5 per cent, to 1,173.97. The S&P is down 0.2 per cent for the week. Both the Dow and S&P have fallen five of the past six weeks.
The Nasdaq composite fell 65.71, or 2.6 per cent, to 2,480.33. The technology-heavy index eked out a gain of 0.48 point for the week.
Cash poured into Treasurys and gold, assets believed to be safer bets during a weak economy. The yield on the 10-year Treasury note fell to two per cent, and briefly traded below that level. It was 2.14 per cent shortly before the report came out. Yields fall when demand for bonds increases.
The price of gold rose 2.8 per cent to $US1,880 ($A1,755). Fears that a stalling economy could reduce demand for oil and petrol pushed benchmark crude oil down $US2.48 ($A2.32), or 2.8 per cent, to $86.45.
Trading volume was thin ahead of the Labour Day weekend at 3.8 billion shares, 11 per cent below the average volume for the year. Low volume can result in larger-than-usual moves in stock indexes.
LONDON – European stock markets slumped badly, hit by the double whammy of a much worse-than-expected US jobs report and fresh concerns over a eurozone debt crisis which refuses to go away.
In London, the FTSE 100 index of leading companies closed down 2.34 per cent to 5,292.03 points. In Paris, the CAC 40 shed 3.59 per cent to 3,148.53 points and in Frankfurt the DAX dropped 3.36 per cent to 5,538.33 points.
Other European markets showed similar losses, with Milan tumbling 3.89 per cent and Madrid off 3.40 per cent.
Gold jumped to $US1,875.25 dollars an ounce, up from $US1,821 late Thursday.
The euro fell to $US1.4207, around three-week lows, hurt by fresh concern over debt-stricken Greece.
HONG KONG – Asian markets slipped in nervous trade ahead of the release of key jobs data from the United States, with profit-taking adding to downward pressure after a four-day rally.
Tokyo ended 1.21 per cent, or 110.06 points, lower at 8,950.74 and Seoul shed 0.69 per cent, or 12.95 points, to 1,867.75 while Sydney dived 1.50 per cent, or 64.6 points, to 4,242.9.
Hong Kong closed 1.81 per cent, or 372.42 points, lower at 20,212.91 while Shanghai lost 1.09 per cent, or 27.76 points, to end at 2,528.28.
Most Asian markets had risen over the past four days after US Fed chief Ben Bernanke suggested that the bank would kick off a fresh round of monetary easing in the near future.
But investors were cautious prior to the US non-farm payroll figures from Washington later on Friday as they look for clues to the state of the world’s biggest economy after months of broadly weak data pointed to a slowdown. Many fear a return to recession.
Manufacturing in Asia and the eurozone was unable to provide much support.
The Japanese market was largely unaffected by Japan’s new cabinet lineup, including the appointment of relative unknown Jun Azumi as new finance minister, brokers said.
In other markets: Taiwan was flat, shedding just 0.70 points to 7,757.06. Manila closed 0.60 per cent, or 26.33 points, higher at 4,392.91. Jakarta was closed for a public holiday.
WELLINGTON – Wellington fell 0.87 per cent, or 29.05 points, to 3,303.22.
