Stocks tumbled, wiping out the weekly gain for the Standard & Poor’s 500 Index, while the dollar, Treasuries and gold rose following a report showing American job growth stalled in August. European sovereign-debt risk climbed to a record amid bickering over Greece’s bailout.
The S&P 500 fell 2.5 percent to 1,173.97 at the 4 p.m. close in New York and the Stoxx Europe 600 Index lost 2.4 percent. The Dollar Index rose 0.4 percent in a fourth straight gain, its longest rally since January, and the Swiss franc rose versus all 16 major peers. Ten-year Treasury yields sank 14 basis points to 1.99 percent, four points above a record low, and the 30-year rate reached the lowest since 2009. Gold jumped 2.6 percent to $1,876.90 an ounce; oil lost 2.8 percent.
The Labor Department said U.S. payrolls were unchanged last month, the weakest reading since September 2010 and worse than the median economist forecast that called for growth of 68,000. Stocks sank and Treasuries surged in August as investors bet that the odds of a recession had increased. Markets reversed course toward the end of the month amid speculation the Federal Reserve would act to spur growth.
“Another disappointing report that speaks to a severe unemployment crisis that, unfortunately, is becoming even more stubbornly embedded,” Mohamed A. El-Erian, the chief executive officer at Pacific Investment Management Co. in Newport Beach, California, wrote in an e-mail. Pimco is the world’s largest bond-fund manager. “Along with Europe’s dislocations, this fuels concerns about the global economic outlook and the growing risk of a recession.”
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