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Dec 4, 2008 8:10 pm US/Eastern
Street Turns Cautious Ahead Of Unemployment Report
NEW YORK (AP) ―
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A trader works the floor of the New York Stock Exchange on Sept. 15, 2008.
Spencer Platt/Getty Images
A period of relative calm on Wall Street ended Thursday as stocks tumbled in the final hour of trading on growing investor anxiety about the government's November employment report.
The major indexes each fell more than 2.5 percent, including the Dow Jones industrial average, which dropped 216 points.
It was clear that investors were worrying that Friday's employment report would show a further deterioration in the job market; employers have already cut 1.2 million jobs this year through October, leaving the unemployment rate at a 14-year high of 6.5 percent. Economists expect the Labor Department will report that the jobless rate rose to 6.8 percent in November and that companies cut another 320,000 jobs.
"It's all about jobs and right now the outlook is pretty downbeat," said Alan Skrainka, chief market strategist with Edward Jones in St. Louis.
The late-session decline followed a decent run for stocks, which closed higher in seven of the previous eight sessions. It also came as the heads of the Detroit automakers appeared before Congress with hopes of persuading skeptical lawmakers to save their troubled industry. While the market expects the Detroit companies will be able to win some aid from Capitol Hill, support for the troubled companies wasn't assured.
General Motors Corp., Ford Motor Co. and Chrysler LLC are collectively seeking $34 billion in emergency aid.
Anthony Conroy, managing director and head trader for BNY ConvergEx Group, said investors are likely taking money off the table ahead of the employment report and that there was disappointment over the appearance of the heads of the U.S. automakers on Capitol Hill.
"There was no clarity coming out of the autos. People were expecting some clarity," he said.
According to preliminary calculations, the Dow Jones industrial average fell 215.45, or 2.51 percent, to 8,376.24.
Broader stock indicators also declined. The Standard & Poor's 500 index fell 25.52, or 2.93 percent, to 845.22, and the Nasdaq composite index fell 46.82, or 3.14 percent, to 1,445.56.
The Russell 2000 index of smaller companies fell 14.23, or 3.14 percent, to 439.53.
GM fell 79 cents, or 16 percent, to $4.11, while Ford fell 19 cents, or 6.7 percent, to $2.66. Chrysler isn't publicly traded.
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