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Jobless data sends stocks reeling
Major stock indexes fell more than 2.6 percent after the government said the U.S. unemployment rate hit a 26-year high. The Dow Jones industrials closed at their lowest level in six weeks.
Trading on the New York Stock Exchange was extended until 4:15 p.m. Eastern time in order to execute customer orders impacted by system irregularities, an NYSE spokeswoman said.
As investors sold off stocks amid fresh concerns about the economy, they moved into the safety of bonds, pushing Treasury yields lower.
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The report - one of the most closely watched economic indicators - disappointed investors who had become encouraged by positive signs recently that key areas of the economy including housing and manufacturing were showing modest signs of improvement.
The stock market rallied furiously this spring off of 12-year lows beginning in early March on hopes for a recovery, but the upward momentum stalled in mid-June as doubts began to emerge about whether the economy had really found a bottom. The June jobs report was the latest blow to the market's confidence.
"There's more and more evidence mounting against this rally continuing," said Doug De Groote, a managing director at United Wealth Management. Consumers are likely to lead the nation out of the ongoing recession, but that won't happen if more people are losing their jobs, he said.
Shares of consumer products companies were among the hardest hit Thursday.
The Dow Jones industrials lost 223.32, or 2.6 percent, to 8,280.74, the lowest close since May 22. It was the average's worst day since April 20.
The Standard & Poor's 500 index fell 26.91, or 2.9 percent, to 896.42 and the Nasdaq composite index fell 49.20, or 2.7 percent, to 1,796.52.
The market's recent rally pushed stock prices back to reasonable levels after they were severely undervalued, said Tim Courtney, chief investment officer at Burns Advisory Group.
