Dow Jones plunges on shock payroll data
The Dow Jones fell by as much as 200 points whilst gold rose above the $700 on surprise data showing that the US economy shed jobs for the first time in four years in August.
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.
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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.
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