Stocks tumble as investors shift focus to economy
Gains from the election day rally are nearly erased. Employment data raise new concerns about the stagnating economy.
Reporting from New York — Any hopes for a post-election honeymoon in the stock market were dashed quickly this morning as prices retreated in the face of souring employment data, particularly in the all-important services sector.
The Dow Jones industrial average skidded more than 250 points, shedding almost all of the gain it notched in Tuesday's election day rally, as investors turned their gaze from the optimism generated by Barack Obama's historic victory to the prosaic nuts and bolts of a sliding economy.
A report from a large employment-services firm estimated that U.S. companies slashed 157,000 jobs last month, while another report showed that activity in the services sector -- a broad grouping that includes everything from janitors to lawyers -- contracted sharply in October.
In contrast to Tuesday's 305-point rally in the Dow, today's sell-off underscored the likelihood that the stagnating economy is likely to retake center stage now that the presidential election has concluded.
Investors worry that the string off glum economic news could linger for months, even if the government goes through with another stimulus plan.
As of 9:25 a.m., the Dow was off 237.35 points, or 2.5%, to 9,387.93. The Standard & Poor's 500 fell 2.7%, while the Nasdaq composite index gave up 3.1%.
Oil prices fell back below $70. After jumping more than 10% on Tuesday, crude oil was down $4.85, or 6.9%, to $65.68 a barrel.
Hamilton is a Times staff writer.
walter.hamilton@latimes.com
