Dow stock index falls nearly 400 points on oil, jobs news
NEW YORK — Stock prices tumbled today, sending the Dow Jones industrials down nearly 400 points, as a big jump in unemployment and the biggest one-day surge in oil prices caused investors to reassess their recent optimism about the economy.
The mood on Wall Street was the mirror opposite of Thursday, when benign economic data and impressive retail sales left investors feeling that the economy could be on the mend.
But that optimism may have set investors up for disappointment today.
Though the economy shed fewer jobs last month than expected -- 49,000 versus the consensus prediction of 60,000 -- so-called whisper numbers circulating on Wall Street had raised hopes for a better showing.
The jobless rate soared to 5.5% in May from 5% a month earlier, the highest level since late 2004 and the biggest jump in more than two decades. Economists had expected a rise to only 5.1%.
Oil, meanwhile, returned to record territory with a vengeance after an analyst predicted that crude would hit the $150-a-barrel mark by July 4. Crude futures rocketed up $10.75 to settle at $138.54 a barrel, exceeding the record price set about two weeks ago. It was the biggest one-day rise in dollar terms in the New York Mercantile Exchange's history.
Put it all together, and worries resurfaced that consumers would buckle from the double whammy of rising unemployment and soaring gasoline prices.
The Dow, which had jumped 214 points Thursday, gave up almost twice that amount today, falling 394.64 points, or 3.1%, to 12,209.81.
The Standard & Poor's 500 sank 43.37 points, or 3.1%, to 1,360.69. The Nasdaq composite index lost 75.38 points, or 75.38 points, or 3%, to 2,474.56.
walter.hamilton@latimes.com
