By TIM PARADIS, AP Business Writer
1 minute ago
Selling swept across Wall Street for a second straight session Friday on news that the economy shed jobs for the eighth straight month in August and at a faster-than-expected pace. The Dow Jones industrial average fell about 100 points.
<strong>The Labor Department said payrolls shrank by 84,000 last month, more than the 75,000 economists predicted, and higher than the 51,000 jobs lost in July. The unemployment rate rose to a five-year high of 6.1 percent from 5.7 percent.
The report confirmed Wall Street's fears that the economy continues to weaken. The nation has lost nearly 550,000 jobs so far this year, eroding investors' hopes for a late-year recovery.
"This was an ugly number that pretty much confirms that our economy continues to trend downward," said Jack Ablin, chief investment officer of Harris Private Bank. "I had thought things were stabilizing, and this just knocks the legs out of any hope of seeing much economic improvement right now."
Meanwhile, a downgrade of Merrill Lynch & Co. compounded the market's misery. Goldman Sachs analyst William Tanona cut the nation's largest brokerage to a "sell" rating on expectations it will incur fresh write-downs on top of the $5.7 billion it announced in late July. Merrill fell 25 cents to $25.96.
In midmorning trading, the Dow fell 101.61, or 0.91 percent, to 11,086.62.
Broader stock indicators also fell. The Standard & Poor's 500 index slid 10.97, or 0.89 percent, to 1,225.86, and the Nasdaq composite index fell 18.05, or 0.80 percent, to 2,240.99.
Stocks turned in a dismal performance on Thursday, with all three major indexes moving back into bear market territory, defined as a 20 percent drop from a recent peak. The Dow plunged more than 340 points in a sell-off underpinned by disappointing economic news and lackluster sales reports from retailers.
With concerns about the economy and more problems in the financial sector, investors again moved into the safety of government debt. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.58 percent from 3.62 percent late Thursday.
As it had earlier in the week, Wall Street found little comfort from falling oil prices. Crude at one point dropped below $106 a barrel Friday as the dollar continued to gain on the euro and investors waited to see whether OPEC moves to restrict output next week following a two-month plunge in prices. The Organization of the Petroleum Exporting Countries is scheduled to meet early next week in Vienna and has indicated it may take action to defend the $100-a-barrel level.
Light, sweet crude fell $2.09 to $105.80 a barrel in electronic trading on the New York Mercantile Exchange.
Declining issues outnumbered advancers by about 3 to 1 on the New York Stock Exchange, where volume came to 221.2 million shares.
The Russell 2000 index of smaller companies fell 8.57, or 1.19 percent, to 710.05.
And the gloom about the U.S. economy was not contained to just major American indexes. Investors overseas sent shares lower on concerns about America's effect on global growth.
Japan's Nikkei stock closed down 2.75 percent. In afternoon trading in Europe, Britain's FTSE 100 fell 0.79 percent, Germany's DAX index dropped 1.40 percent, and France's CAC-40 shed 1.37 percent.
http://news.yahoo.com/s/ap/20080905/ap_on_bi_st_ma_re/wall_street
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