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Stocks end down more than 2% in broad sell-off

June 01, 2012|By Andrew Tangel
  • Major U.S. stock indexes plummeted after a weak jobs report. Above, the floor of the New York Stock Exchange.
Major U.S. stock indexes plummeted after a weak jobs report. Above, the… (Richard Drew / Associated…)

Stocks nose-dived after the government's dismal employment report showed weak job gains, as Wall Street grew more pessimistic about the global economy and Europe's ability to solve its debt crisis.

Major U.S. indexes all posted sharp declines of more than 2% after trading closed in New York.

The Dow Jones industrial average lost 275 points, or 2.2%, closing at 12,119. The broader Standard & Poor's 500 index lost 32 points, or 2.5%, to 1,278. The Nasdaq dropped 80 points, or 2.8%, to 2,747.

The Dow erased its gains for the year, and the S&P was still up 1.6% for all of 2012. Both the indexes were on verge of an official correction -- a decline of 10% from their recent highs -- while the Nasdaq ended the day down 12% from its March 27 high of 3,123 points.

U.S. markets' declines followed a rough day in European equities markets. Of major European markets, the German DAX fared the worst, ending the day down 3.4%.

As investors sold off stocks, they plowed their cash into safe investments, pushing down Treasury yields to record lows.

The first piece of bad news Friday came when the Labor Department reported employers added only 69,000 jobs in May, less than half of what analysts were anticipating and the smallest gain in a year.

The unemployment rate rose for the first time in nearly a year, to 8.2% in May.

Then the Institute for Supply Management said its index of American factory activity came in under expectations, dropping to a level of 53.5 in May from 54.8 in April.

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