U.S. stocks tank on dismal jobs data; Dow down 2.22%

latest news: 02/06/2012- U.S. stocks plunged on Friday, as investors sold equities and rushed to the safety of the U.S. Treasury after the Bureau of Labor Statistics announced the U.S. economy created a scant 69,000 jobs in May.

The Dow Jones Industrial Average closed down 2.22% on Friday, the S&P 500 index was down 2.46% while the Nasdaq Composite index finished down 2.82%.

The May jobs report served as the chief weather vane Friday.

In the U.S., the Bureau of Labor Statistics reported earlier that the economy added a net 69,000 net nonfarm payrolls in May, far below expectations for a gain of around 150,000.

April and March jobs figures were revised down as well.

The unemployment rate rose to 8.2% from 8.1%.

The jobs data sparked widespread talk the Federal Reserve will consider stimulating the economy via monetary easing to ensure price stability and more optimal employment conditions.

While monetary stimulus tends to send stock prices rising over time, investors sold on sentiment that until the Fed makes easing official and until that excess liquidity finds its way into equities markets, a weak economy means weak earnings.

Tepid manufacturing data sent stocks falling as well.

The Institute for Supply Management reported that its national factory activity index dropped to 53.5 in May from 54.8 in April, just missing expectations for 53.9.

Factory output numbers out of China and Europe have disappointed as well, fueling fears that the global economy is entering a period of synchronized cooling, more serious than running into a soft patch.

Leading Dow Jones Industrial Average gainers included Wal-Mart Stores, down 0.41%, AT&T, down 0.79%, and Exxon Mobil, down 0.90%.

Leading index losers included Hewlett-Packard, down 6.31%, Bank of America, down 4.49%, and American Express, down 4.30%.

European indices, meanwhile, finished down.

After the close of European trade, the EURO STOXX 50 fell 2.37%, France's CAC 40 fell 2.21%, while Germany's DAX 30 finished down 3.42%. Meanwhile, in the U.K. the FTSE 100 closed down 1.14%.




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European stock markets remained higher on Monday, as investors were

European stock markets remained higher on Monday, as investors were hopeful that Greece will not be forced out of the euro zone as recent opinion polls placed pro-austerity party New Democracy in first place of the June election race.

During European afternoon trade, the EURO STOXX 50 rose 0.42%, France’s CAC 40 climbed 0.80%, while Germany’s DAX 30 advanced 0.51%.

Market sentiment found support as opinion polls on Sunday showed that Greece's conservative party New Democracy swung into first place ahead of next month's elections, as the country's socialists claimed that European leaders are warming to the idea that bailout terms for Athens should be softened to ease pressure on the economy.

Uncertainty remained however, as talk of contingency plans have emerged in case Greece leaves the euro zone, posing severe contagion risks to the whole monetary union.

Financial stocks remained mixed as Dutch lender ING Group surged 1.79%, France’s Societe Generale climbed 1.35% and German Deutsche Bank added 0.82%, while Spanish lenders BBVA and Banco Santander plummeted 1.62% and 2.06 % respectively.

Concerns over the health of Spain’s banking sector continued to weigh after Spain’s government announced Sunday that it was to recapitalize one of the country’s largest commercial lenders, Bankia.

Bankia shares were suspended on Friday, shortly before it announced it made a loss of EUR3 billion in 2011 and was seeking government aid.

Separately, Standard & Poor’s cut the credit ratings of Bankia, Banco Popular and Bankinter to junk on Friday, citing Spain’s weakening economy. The rating company had downgraded 11 Spanish banks on April 30.

Meanwhile, steel company ArcelorMittal saw shares advance 2.45% after announcing that it is to supply 8300 tons of rail for EUR8.4 million for Invensys Rail Dimetronic’s first Westrace 2.0 interlockings project in Spain at Lasarte and Anorga, on the EuskoTren’s Bilbao - San Sebastian route.

In London, FTSE 100 rose 0.88%, supported by strong gains in financial and mining stocks.

Lloyds Banking led gains, with shares soaring 3.45%, and the Royal Bank of Scotland jumped 2.01%, while Barclays climbed 1.34%. HSBC Holdings was steady, on the other hand, edging down 0.06%.

Mining giant Rio Tinto also surged 3.50%, while Bhp Billiton and Anglo American jumped 2.45% and 2.22% respectively.

Copper producers Xstrata and Kazakhmys extended earlier gains, as shares climbed 2.90% and 2.85%.

Elsewhere, maker of engineering software products, Aveva Group Plc skyrocketed 11.07% after reporting full-year revenue of GBP195.9 million, topping the average analyst estimate of GBP192.2 million. Chief Executive Officer Richard Longdon said, “We are confident about the prospects for 2012-13.”

Earlier Monday, Spain’s Treasury auctioned the full targeted amount of EUR3.5 billion of two-year bonds, but the yield climbed to 4.03%, up sharply from 3.35% at a similar auction in April.

Trade looked likely to remain quiet on Monday, with some markets in Europe closed for holidays, while U.S. markets were to remain closed for the Memorial Day holiday.