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Saturday, June 5, 2010

Stocks plummet to 4-month low on jobs report, worsening crisis in Europe

U.S. stocks hit their lowest levels since February on Friday as a disappointing jobs report and worries about the fiscal health of yet another European country ignited a sell-off.

All the major U.S. indexes plunged by more than 3 percent after a Labor Department report showed that hiring waned in the private sector last month, busting a string of more upbeat data about the U.S. economy and crushing investor confidence about the prospects for growth.

The jobs data added to ongoing market jitters about the debt crisis in Europe, made worse on Friday when a spokesman for Hungary's prime minister said that his country's economy is in "a grave situation." The remark fanned fears that the debt problems gripping some European countries will sink the chances of a global economic recovery.

"This jobs report was supposed to be the catalyst that would have showed us that the U.S. economy is insulated" from Europe's financial troubles, said Jack Ablin, chief investment officer at Harris Private Bank in Chicago. "Instead, it showed us that business leaders, just like investors, are very nervous and tentative."

The sell-off resulted in the second-worst day of the year for U.S. stocks, as the Dow Jones industrial average dipped below the psychologically significant 10,000 level. The Dow shed 3.15 percent or 323.31 points. It closed at 9,931.97, with all 30 blue-chip stocks down for the day.

The Standard & Poor's 500-stock index, a broad measure of U.S. markets, fell 3.44 percent, or 37.95 points, to 1,064.88. The tech-heavy Nasdaq slumped 3.64 percent, or 83.86 points, to 2,219.17.

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