...The index is now down 0.3% for the year.
“2012 is beginning to look horribly like 2011 – initial high hopes that the recovery was kicking into high gear, subsequently dashed,” said Nigel Gault, chief U.S. economist at IHS Global Insight, in an emailed report.
The S&P 500 Index /quotes/zigman/3870025 SPX -1.89% dropped 24.49 points, or 1.7%, to 1,285.98 and the Nasdaq Composite Index /quotes/zigman/123127 COMP -2.12% declined 53.90 points, or 1.9%, to 2,773.40.
The S&P 500 is up 2% for the year, while the Nasdaq is up 6.3%.
Gold futures rallied as investors sought a safe haven and the dollar fell on speculation the weak data could trigger more quantitative easing from the Federal Reserve. The August gold contract /quotes/zigman/676896 GCQ2 +2.99% surged $47.40, or 3.1%, to $1,612.10 an ounce.
Yields on 10-year Treasury notes /quotes/zigman/4868283/delayed 10_YEAR -6.09% hit a fresh low of 1.44% and recently traded down 9 basis points at 1.47%.
May unemployment rate creeps up to 8.2%
The U.S. economy added just 69,000 jobs in May, less than expected, and the unemployment rate rose to 8.2%. Phil Izzo and Sudeep Reddy have details on The News Hub.
The losses for stocks came after the Labor Department reported Friday that the U.S. economy added only 69,000 jobs in May, while economists polled by MarketWatch expected an increase of 165,000. The unemployment rate edged up to 8.2% from 8.1% as more people entered the workforce. Read more on jobs report.
“Disappointing payroll data in combination with mounting external risks obviously increase the pressure on the Fed to apply further stimulus,” wrote Bernd Weidensteiner, an analyst at Commerzbank AG, in a note, with the euro-zone sovereign debt crisis being the main external risk.
Adding to the gloom, manufacturing data from Europe and China also pointed to deteriorating economic conditions.
At 10 a.m. Eastern, the Institute for Supply Management said its manufacturing index fell to 53.5% in May from 54.8% in April. Economists polled by MarketWatch had forecast a slide to 54%. Readings over 50 indicate the sector is still expanding. Read more on ISM.