Stocks Plunge As Jobs Growth Stalls
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Stocks plummeted Friday on a government jobs report that contained bad news on growth and inflation, and Intel once again led the way lower.
The U.S. Labor Department reported that the economy added just 18,000 jobs last month, well below estimates, and wages rose at a 0.4% clip for the second straight month as the jobless rate moved up to 5%. The report provided the latest evidence of "stagflation" stagnant growth and rising inflation that could make it difficult for the Federal Reserve to cut interest rates to ward off a recession.
Intel tumbled 8%, for a one-week decline of 15%, as JP Morgan became the latest to downgrade the chip giant on slowdown concerns. The Philadelphia Semiconductor Index fell 4.7%, down 9% on the week.
AMD, Apple, Dell, IBM and HP also suffered steep losses on fears that the slowdown could spread to PC sales, based on results from Acer and European retailer DSG.
Motorola fell 6% on negative comments from Citigroup, and Research in Motion lost 8%.
Micrel plunged 20% after lowering sales guidance.
The Nasdaq fell 98 to 2504, the S&P lost 35 to 1411, and the Dow tumbled 256 to 12,800. Volume rose to 4.14 billion shares on the NYSE, and 2.52 billion on the Nasdaq. Decliners led by a 26-7 margin on the NYSE, and 25-5 on the Nasdaq. Downside volume was 93% on the NYSE, and 93% on the Nasdaq. New highs-new lows were 35-561 on the NYSE, and 49-475 on the Nasdaq.