* Weak U.S. payrolls, PMI reports in Europe, spell gloom
* Global shares slide; bond prices jump on QE3 hopes
* Brent crude falls to 3-month lows under $113 a barrel
* Dollar slips vs yen in volatile trade, euro weakens
By Herbert Lash
NEW YORK, May 4 Global stocks swooned and crude
oil tumbled on Friday after a weak U.S. jobs report and economic
data that pointed to a deeper recession across the euro zone
than previously thought.
Major U.S. and European stock indexes fell more than 1
percent, crude oil slumped about 4 percent and government debt
prices jumped after the Labor Department said U.S. employers cut
back on hiring in April more than expected.
Employers added just 115,000 workers to payrolls last month,
or 55,000 less than economists expected. The unemployment rate
fell one-tenth of a point to 8.1 percent, a three-year low, but
only because the workforce shrank as people retired or stopped
looking for a job.
The third straight monthly decline in hiring growth spurred
concerns that the U.S. economy is losing momentum and doused
hopes that a stretch of strong winter hiring had signaled a
turning point for the U.S. recovery.
"The U.S. economy is not growing fast enough to improve the
job market. When all is said and done that is the most important
statistic," said Joseph Trevisani, chief market strategist at
Worldwide Markets in Woodcliff Lake, New Jersey.
The Dow Jones industrial average was down 164.16
points, or 1.24 percent, at 13,042.43. The Standard & Poor's 500
Index was down 21.27 points, or 1.53 percent, at
1,370.30. The Nasdaq Composite Index was down 58.14
points, or 1.92 percent, at 2,966.16.
The U.S. jobs data added to the gloomy tone from Europe,
where purchasing managers' indexes, primarily covering services,
suggested a recession across the euro zone could extend to
mid-year and be deeper than previously thought.
Markit's Eurozone Services PMI, which gauges business
activity over a month, came in at 46.9 for April, sharply lower
than 49.2 in March. Anything below 50 signifies contraction.
The JPMorgan Global Purchasing All-Industry Output Index of
about 20 countries showed declines in April from March.
In Europe, the pan-European FTSEurofirst 300 index
closed down 1.7 percent to 1,027.15 points, and the Euro STOXX
50 index fell 1.7 percent to 2,249.27, despite
strong corporate earnings from Royal Bank of Scotland,
BNP Paribas and Lafarge.
MSCI's all-country world equity index fell
1.5 percent to 321.58.
Some analysts said the jobs report, which followed
weaker-than-expected services sector data this week, will fuel
expectations of a third round of stimulus, or quantitative
easing, by the Federal Reserve to keep rates low and foster
"The headline disappointment increases the likelihood that
(Fed Chairman Ben) Bernanke will move forward with QE3 later
this summer in an attempt to further bolster employment growth,"
said Michael Woolfolk, senior currency strategist at BNY Mellon
in New York.
The dollar slipped against the yen in volatile trading after
the payrolls number, with the U.S. currency down 0.41
percent at 79.86 yen.
The U.S. dollar index rose 0.37 percent at 79.512.
The euro was down 0.43 percent at $1.3094.
The benchmark 10-year U.S. Treasury note rose
15/32 in price to yield 1.88 percent, and the 30-year U.S.
Treasury bond gained 25/32 in price to yield 3.08
Oil fell to three-month lows around $112 a barrel, on course
for its steepest weekly fall since December, after the weak U.S.
Brent crude oil futures lost $3.80 to $112.28 a
barrel, lows last seen in early February.
U.S. crude fell $4.51 to $98.03 a barrel.
"We are locked in this sluggish growth environment," said
Robert Vanden Assem, head of investment grade fixed income at
PineBridge Investments in New York, which manages about $67
billion in assets.