Stocks Crushed as Joblessness, Oil Spike

Stocks suffered their worst day in four months Friday on the biggest jump in the jobless rate in 22 years, a record one-day spike in oil prices, and a threat to raise interest rates by the head of the European Central Bank.

The spike in the U.S. jobless rate from 5.0% to 5.5% was driven in part by students entering the workforce, but the fifth straight monthly jobs loss coupled with a $10 spike in oil prices and dollar-damaging comments from ECB President Jean-Claude Trichet gave traders little reason to hold stocks going into the weekend.

The result was a 3% plunge in the major averages on overwhelmingly negative breadth.

National Semi (NYSE: NSM) was one of the very few winners, gaining 5% on better than expected results and guidance, as the company said business conditions improved in the quarter.

Yahoo (NASDAQ: YHOO) gained a fraction after billionaire investor Carl Icahn recommended a $49.5 billion price for the company. The only other gainer among the 25 most heavily traded Nasdaq stocks was Tumbleweed Communications (NASDAQ: TMWD), which soared 45% on a buyout offer from France’s Sopra Group.

Intel (NASDAQ: INTC) lost 4% on its latest antitrust troubles, this time with the FTC.

Some of the day’s biggest losers were MRV Communications (NASDAQ: MRVC), down 23% on stock option concerns, and Valence Technology (NASDAQ: VLNC) and Network Equipment (NYSE: NWK), both of which fell on earnings news.

The Nasdaq plunged 75 to 2474, the S&P lost 43 to 1360, and the Dow tumbled 394 to 12,209. Volume rose to 4.78 billion shares on the NYSE, and declined to 2.19 billion on the Nasdaq. Decliners led by a 27-6 margin on the NYSE, and 23-5 on the Nasdaq. Downside volume was 92% on the NYSE, and 89% on the Nasdaq. New highs-new lows were 147-158 on the NYSE, and 64-149 on the Nasdaq.