Dow Jones plunges on shock payroll data

The US economy shed jobs last month for the first time in four years, statistics out today revealed. According to Labour Department figures, non-farm payrolls were down 4,000, nothing like the 115,000 increase predicted by Wall Street economists.

The data renewed concerns that the US could slide into recession and galvanised expectations of an interest rate cut later this month.

The Dow Jones opened sharply lower, and fell by as much as 200 points to as low as 13,160. The S&P 500 and Nasdaq composite were also lower.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

In London, stocks fell sharply on the news from across the Atlantic. The benchmark FTSE 100 index was down by as much as 56 points at 6,256 at 2pm. The slump was echoed across Europe, with the French CAC-40 down 2% whilst the German DAX-30 lost 1.7%.

Elsewhere in the market, bond prices rose on a flight to quality. The yield (which moves inversely to price) on the 10-year Treasury dipped from 4.51% to 4.42%.

Recession fears saw the dollar fall to a one-month low of 1.3771 against the euro and as low as 113.58 against the yen.

And safe-haven gold soared as high as $704.60 today, whilst fellow precious metal silver rose to $12.64 an ounce.