NEW YORK, April 5 — Major stock markets tumbled, the dollar fell, while Treasury prices rallied today after a much weaker than expected US jobs report added to fears the US economic recovery was losing steam.
Brent crude oil fell to a five-month low as bleak US jobs data and bulging inventories dimmed the outlook for economic growth and fuel demand. Safe-haven gold prices rose.
US employers hired at the slowest pace in nine months in March, adding just 88,000 nonfarm jobs, below an expected 200,000, the Labour Department said. The jobless rate ticked a tenth of a point lower to 7.6 per cent, but largely due to people dropping out of the work force.
Fears had already been growing about the US recovery before the jobs report due to weaker-than-expected data this week on manufacturing activity and private sector hiring.
“The report will fuel concerns about another spring swoon for the economy, the adverse impact of Congressional dysfunction and, more generally, the weak underlying dynamism of the economy,” said Mohamed El-Erian, co-chief investment officer at Pacific Investment Management Company.
The MSCI world stocks index slipped 0.9 per cent to 355.54 points.
The Dow Jones industrial average dropped 168.49 points, or 1.15 per cent, to 14,437.62. The Standard & Poor’s 500 Index fell 19.40 points, or 1.24 per cent, to 1,540.58. The Nasdaq Composite Index lost 55.15 points, or 1.71 per cent, to 3,169.83.
European shares tumbled 2 per cent to 1157.61 points.
The dollar was down 0.2 per cent against a basket of major currencies to 82.496. The euro rose 0.5 per cent to US$1.2998. Against the yen, the dollar rose 0.3 per cent to ¥96.58.
Brent crude fell to a low of US$104.92, its lowest since November 5, before recovering slightly to trade around US$105.24, down US$1.12. US crude dropped 77 cents to a low of US$92.49.
Spot gold rose to US$1,567.81 an ounce from US$1,552.71. — Reuters