A disappointing unemployment report hammered Wall Street ahead of the 4th of July weekend. Losses were broad based as financials and energy stocks were among the most heavily sold.
Job losses rose for the first time in four months in June. The Labor Department reported 467,000 jobs were cut, which was 145,000 higher than in May and well ahead of forecasts. The unemployment rate now stands at 9.5%.
The Dow Jones lost 223.32 points, or 2.63%, to 8,280.74, the S&P's 500 sank 26.91 points, or 2.91%, to 896.42 and the NASDAQ fell 49.20 points, or 2.67%, to 1,796.52.
Financials struggled as the total number of banks to close their doors so far this year reached 46 when Illinois’ John Warner bank was shut. JPMorgan and Wells Fargo sank 4.4% each, while Bank of America shed 3.1%.
Morgan Stanley, Citigroup and Goldman Sachs lost 4.8%, 3.1% and 2.6% respectively.
American Express was 3.2% cheaper, while Berkshire Hathaway slid 1.2%.
Energy stocks sank as NYMEX light crude oil for August delivery fell US$2.37 to US$66.94 a barrel. Chevron, Exxon Mobil and ConocoPhillips dropped 3.2%, 2.9% and 2.6%.
Aluminium producer Alcoa fell 4.7%.
The tech sector was weak with IBM and Microsoft shedding 3% and 2.8%. Apple lost 2%, while Hewlett-Packard and Dell weakened 2.2% and 3.1%.
Google and Yahoo! dipped 2.5% and 2.7%.
Retailer Wal-Mart was 1.2% lower, while Target and Costco shed 3.2% and 2.5%.
In automotive news, arguments for and against General Motor’s bid to sell its assets to what has been labelled a “new GM” have been presented before the courts. It is now up to the judge make a decision. Rival Ford edged 0.3% lower.
COMEX gold for August delivery fell US$10.60 to settle at US$930.70 an ounce.
European Markets
The negative US jobs report concerned European markets causing a large sell-off. Banks fell as most sectors remained below the line.
The UK benchmark FTSE 100 lost 106.44, or 2.45% at 4,234.27. France’s CAC40 sank 100.59, or 3.13% to 3,116.41, while the German DAX dropped 186.95, or 3.81%, to 4,718.49.
Financials took the most points off the market. France’s Societe Generale and BNP Paribas shed 3.5% and 3.3%.
Royal Bank of Scotland, Lloyds and Standard Chartered slid 3.8%, 3.4% and 2.1% respectively. Commerzbank and Deutsche Bank dropped 6.5% and 2.5%.
Insurers AXA and Allianz slumped 5.4% and 4.4%.
Energy stocks were lower, with BG Group, Royal Dutch Shell and Total losing 3%, 3.3% and 3.8%. BP slid 1.9%.
Miners Antofagasta and Xstrata lost 4.2% each, while Anglo American sank 5.8%.
Aussie peers BHP Billiton and Rio Tinto weakened 4.7% and 5.7%.
Automakers Volkswagen and Daimler slumped 7.8% and 5.5% after an analyst downgraded the sector.
Japanese Markets
Japan’s Nikkei lost ground as investors continue to cash in gains due to economic uncertainty. Energy and banking stocks led the slide.
The Nikkei lost 63.78, or 0.64% to 9,876.15.
Nippon Oil, Cosmo Oil and AOC fell 3.6%, 2.8% and 1.9% as the price of crude dropped. Petroleum Exploration shed 2.6%.
Aozora Bank and Shinsei Bank sank 6% and 5.1% after revealing they will merge in October 2010.
Honda Motor slid 2.3%, while Hitachi gained 3% on reports it will increase production of lithium ion batteries for hybrid cars.
Bridgestone put on 3.7% after an analyst initiated coverage of the tyremaker with a buy rating.
Electronics makers Canon and TDK shed 1.9% and 1.6%.
Nomura Real Estate Office Fund and Japan Retail Fund jumped 5.4% and 5.9%.
Hong Kong Markets
The Hang Seng slumped late on concerns the spiraling US unemployment would delay any recovery. Resources were robust, despite a decline in base metal prices, while banks were also mixed.
The Hang Seng fell 200.68, or 1.09% to 18,178.05.
Bank of China gained 0.8%, while China’s number one lender, ICBC fell 0.7%. Heavyweight HSBC lost 2.6%.
Ping An Insurance, China’s second largest insurer, rose 3.3% after a brokerage upgrade.
Li & Fung, which make some Bonds products and supplies goods to Wal-Mart, fell 1.4%.
Offshore oil producer Cnooc shed 1.8%, while PetroChina lost 0.4%.
Steelmaker Angang Steel added 0.6%, while Jiangxi Copper put on 0.8%.
