May 4, 2012 / 6:55 PM / 8 years ago

GLOBAL MARKETS-Stocks, oil slump on weak jobs data

* 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 (Reuters) - Global stocks swooned and crude
oil tumbled o n F riday after a weak U.S. jobs report and data
that suggested a deeper recession across the euro zone than
previously thought dented sentiment.	
    Major U.S. and European stock indexes fell more than 1
percent, U.S. crude oil slumped about 4 percent and government
debt prices jumped after the Labor Department said American
employers cut back on hiring in April more than expected.	
    The week loomed as the worst this year for stocks on Wall
Street, with energy leading the decline. The S&P energy index
 of 44 gas and oil-related companies fell 2.0 percent on
fears a worsening economy would sap demand for fuel.	
    Just 115,000 workers were added to payrolls last month, or
55,000 less than economists expected. While the unemployment
rate fell one-tenth of a point to 8.1 percent, a three-year low,
that was only because the workforce shrank as people retired or
stopped seeking work. 	
    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 latest report mirrors the softening of first-quarter
GDP," said Thanos Bardas, a portfolio manager at Neuberger
Berman in Chicago, which manages nearly $200 billion in assets.
"This shows just how painfully slow the U.S. economy is
    The Dow Jones industrial average was down 170.10
points, or 1.29 percent, at 13,036.49. The Standard & Poor's 500
Index was down 22.07 points, or 1.59 percent, at
1,369.50. The Nasdaq Composite Index was down 59.76
points, or 1.98 percent, at 2,964.54.  	
    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 at 1,027.15 points, and the Euro STOXX
50 index fell 1.7 percent to 2,248.34, 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 321.46. 	
    Some analysts said the jobs report, which followed
weaker-than-expected services sector data this week, will fuel
hopes for a third round of stimulus, or quantitative easing, by
the Federal Reserve to keep rates low and to foster growth.	
    "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 0.36 percent at 79.509. 	
    The euro was down 0.52 percent at $1.3082.	
    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 almost a full point in price to
yield 3.07 percent.  	
    Benchmark Brent crude in London fell to three-month lows
around $113 a barrel, on course for its steepest weekly fall
since December, after the weak U.S. jobs report.	
    Brent futures settled down $2.82 at $113.26 a
barrel, lows last seen in early February.	
    U.S. crude settled down $4.05 at $98.49 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.
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