Wall Street stocks tumbled on Friday, with major indexes falling as much as 2 percent as data showed U.S. jobs growth flatlined in August, exacerbating worries the economy is faltering.
Nonfarm payrolls generated no new jobs last month as sagging consumer confidence discouraged already skittish businesses from hiring, keeping pressure on the U.S. Federal Reserve to provide more monetary stimulus to the economy.
In a nutshell, this is the great goose egg economy, a big zero, a big nothing, and this better be one hell of a speech next week, Sal Arnuk, co-manager of trading at Themis Trading in Chatham, New Jersey.
U.S. President Barack Obama will unveil a jobs program he hopes will also provide meaningful tax relief and help the nation's long-term unemployed, a top White House aide told Reuters Insider. Obama is scheduled to speak on September 8.
The Dow Jones industrial average dropped 180.88 points, or 1.57 percent, to 11,312.69. The Standard & Poor's 500 Index fell 21.17 points, or 1.76 percent, to 1,183.25. The Nasdaq Composite Index lost 40.18 points, or 1.58 percent, to 2,505.86.
Stocks had risen recently on hopes the Fed would introduce new stimulus after data reflected a weak economy, gaining back 50 percent of the down move from a July high. However, some analysts said the Fed may be running out of ammunition in its fight to stimulate the economy.
Losing stocks outnumbered winners on the New York Stock Exchange by nearly eight-to-one, while on the Nasdaq, decliners beat advancers by almost six-to-one.
Energy shares dropped as U.S. crude futures fell 2 percent on concerns economic weakness could curb fuel demand. Chevron Corp lost 2.1 percent to $96.45, while the PHLX Oil service sector index shed 2.3 percent.
Bank shares also fell, with the KBW banks index off nearly 3 percent. The Federal Housing Finance Agency is suing big lenders like Bank of America Corp, JPMorgan Chase & Co and Goldman Sachs Group Inc over mortgage practices.
Bank of America fell 6.6 percent to $7.39 and JPMorgan lost 3.4 percent to $35.09, while Goldman stumbled 4.4 percent to $107.17.
Further pressuring equities was confirmation that Greece will miss its 2011 deficit target and uncertainty over Italy's commitment to austerity measures. Renewed fears about the fiscal crisis in the region sparked a 2.6 drop in European shares.
Volume was light, with about 2.18 billion shares traded on the NYSE, NYSE Amex and Nasdaq ahead of the U.S. Labor Day holiday weekend.
(Editing by Jeffrey Benkoe)