NEW YORK (Reuters) - U.S. stocks tumbled on Friday, with the Nasdaq logging its sharpest decline in nearly a year, after data showing rising unemployment stoked expectations of a recession.
Technology shares were the worst performer in a broad-based decline. The Nasdaq logged its sixth straight day of declines, after Intel Corp fell 8.1 percent on concerns that businesses are unlikely to upgrade computer equipment in the face of an economic slowdown.
The U.S. Labor Department reported job creation nearly ground to a halt in December and unemployment rose to a two-year high of 5 percent.
In a sign investors were hunkering down for hard economic times, the market’s rare gainers were from defensive sectors such as electric utilities, drug makers, food and other products seen as essential to daily life.
“The payroll numbers are showing that we don’t have the jobs, and if you don’t have job income you don’t have consumers doing any spending,” said Gary Shilling, president of A. Gary Shilling & Co. of Springfield, New Jersey. “I don’t think there’s much question we’re in a recession now.”
The Dow Jones industrial average was down 256.54 points, or 1.96 percent, at 12,800.18. The Standard & Poor’s 500 Index was down 35.53 points, or 2.46 percent, at 1,411.63. The Nasdaq Composite Index was down 98.03 points, or 3.77 percent, at 2,504.65.
The Nasdaq last suffered a six-day losing streak back in August. The index is now off more than 10 percent from its 52-week closing high set on October 31.
Intel, which was downgraded by JP Morgan on Friday two days after a ratings cut by Banc of America, fell $2.00 percent to $22.67 and is off more than 15 percent since Wednesday.
The Philadelphia Stock Exchange index of semiconductor companies was near a three-year low and is down about 8 percent since the start of 2008. It was off 4.7 percent on Friday.
Coca-Cola Co was the sole gainer in the 30-share Dow, adding 0.2 percent to $61.85.
Among the biggest losers in the retail sector were shares of Bed Bath & Beyond Inc, down 4.4 percent to $26.19 after the home goods retailer gave an earnings outlook below Wall Street estimates late on Thursday.
Department store chains were also down sharply. Shares of Macy’s Inc were down 5 percent to $22.40, Nordstrom Inc lost 6.3 percent at $31.50, and JC Penney Co Inc stock was down 5.5 percent at $37.64.
Power company FPL Group Inc rose 2.8 percent to $68.82, making it the biggest gainer on the S&P. Shares of drug maker Abbott Laboratories, another stock seen as immune to recessionary pressures, rose 0.6 percent to $55.79.
Editing by Leslie Adler
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