U.S. Stocks Plunge


U.S. stocks tumbled, sparking the Dow Jones Industrial Average's worst sell-off in 15 months, after a jump in the unemployment rate and a $10-a-barrel rise in oil heightened concern the economy will sink into a recession.

General Electric Co. and AT&T Inc. led the retreat that erased the market's gain for the week after the Labor Department said the jobless rate grew to 5.5 percent in May from 5 percent in April, the biggest increase since 1986. JPMorgan Chase & Co. led the Standard & Poor's 500 Financials Index to the lowest level in five years on renewed speculation consumer defaults will worsen. J.C. Penney Co., General Motors Corp. and Continental Airlines Inc. dropped as crude climbed to a record.

The S&P 500 Index plunged 43.37, or 3.1 percent, to 1,360.68 and lost 2.8 percent in the week. The Dow Jones Industrial Average dropped 394.64, or 3.1 percent, to 12,209.81, as American International Group Inc. slid 6.8 percent. The Nasdaq Composite Index sank 75.38 to 2,474.56. Twelve stocks dropped for each that rose on the New York Stock Exchange.

Every industry in the S&P 500 retreated as a weakening job market added to concern that consumers buffeted by falling home values and higher fuel costs will pull back spending.

The S&P 500 had rebounded 10 percent through yesterday from a 19-month low in March as better-than-forecast reports on gross domestic product, inflation and manufacturing spurred speculation the economy will avoid a recession. Today's retreat erased a rally yesterday sparked by an unexpected decrease in weekly jobless claims and sales at Wal-Mart Stores Inc. and Costco Wholesale Corp. that topped analysts' estimates.


TradingEconomics.com, Bloomberg
6/6/2008 1:35:28 PM