NEW YORK (AP) — Stocks fell sharply after the government reported that hiring slowed in April, confirming a slew of data during the month that showed the U.S. economy was weakening.
The poor employment report came on a day when investors were already on edge as France and Greece head into elections over the weekend. The outcome of those elections could have a significant impact on the markets because a change in leadership in Paris could prompt a change in the way Europe responds to the debt crisis. The elections in Greece, which recently restructured its massive debt load, have the potential to set off even more volatility.
The U.S. jobs report also reinforced investors' concerns about the U.S. economy a day after major retailers including Costco and Macy's reported that April sales inched up less that 1 percent, the worst performance since 2009. Thursday also brought news that U.S. service companies, which employ roughly 90 percent of the workforce, expanded their business more slowly in April.
The Dow Jones industrial average was down 168 points at 13,038 at noon Friday. All 30 companies that make up the index fell. Caterpillar and Chevron had the biggest declines.
The Standard & Poor's 500 index slipped 21 points to 1,371, while the Nasdaq composite index fell 58 points to 2,966.
Scared investors are turning to safer investments. Nine of the ten industry groups in the S&P 500 index fell. The only one that rose was the utilities sector, which investors see as a relatively safe place to park money when the economy is weak.
Investors also flocked to the safety of U.S. government bonds. The yield on the benchmark 10-year Treasury note dropped sharply to 1.88 percent from 1.92 percent late Thursday. The yield hasn't settled that low since early February.
The culprit for the distress in financial markets was a report from the Labor Department Friday showing that U.S. job growth slumped in April for a second straight month. The 115,000 jobs added were fewer than the 154,000 jobs created in March.
Phil Orlando, chief equity strategist at Federated Investors, noted that the first few months of the year were marked by a number of abnormal conditions including an uncharacteristically warm January and February. That led to a spurt in hiring which usually occurs in spring.
Retail sales and hiring were also affected by an earlier Easter, which fell on April 8 this year, 16 days earlier than last year. That pushed some retail sales ahead to March, leaving April's numbers weaker than they might have been. Retailers also blamed a late Mother's Day for pushing some sales out of April and into May. Unusually warm weather in February and March also pulled forward some sales that would have normally occurred in April.
"The surge in hiring and spending that usually occurs in March through April, occurred earlier in the year this year," said Orlando. "We have to wait for economic numbers from May and June to get a better idea of the underlying strength of this economy."
The price of oil plunged $4 to $98 on worries that demand would drop because of a weakening world economy. It was the first time oil has dropped below $100 since February 13.
Energy company stocks turned lower in response. Southwester Energy Co. fell 7 percent and Marathon Oil Corp. fell 5 percent.
In other trading:
— American International Group fell 3.5 percent. The insurance company, which nearly collapsed during the financial crisis, reported late Thursday that its quarterly earnings doubled due largely to an appreciation in the value of its investments.
— LinkedIn Corp. rose 8 percent after announcing late Thursday that its first-quarter profit more than doubled, topping expectations. The social networking company also announced an acquisition.
— Tilly's Inc. rose 13 percent in the clothing retailer's debut on the New York Stock Exchange. The stock rose to $17.66 after being priced at $15.50. Tilly's sells surf-inspired and casual West Coast-styled clothing and accessories.