NEW YORK (Reuters) ? Wall Street stocks dropped more than 2 percent on Friday as Labor Department data showed jobs growth flatlined in August, intensifying worries the economy is staggering.
Financial, manufacturer and energy stocks suffered the biggest losses as declining issues far outweighed winners on a light-volume day ahead of the long U.S. Labor Day holiday weekend.
Nonfarm payrolls generated no new jobs last month as sagging consumer confidence discouraged already skittish businesses from hiring, keeping pressure on the U.S. Federal Reserve to provide more monetary stimulus to the economy.
Stocks had risen recently on hopes the Fed would introduce new stimulus after data reflected a weak economy, recouping 50 percent of the down move from a July high. However, analysts said the Fed may be running out of options in its fight to stimulate the economy.
The labor report was "clearly less than anticipated and a huge disappointment," said Derek Hoyt, chief investment officer at KDV Wealth Management in Minneapolis, Minnesota. "The likelihood of more stimulus has increased dramatically as a result of this and some other recent data, but at this point it's unclear how much that will really help markets."
U.S. President Barack Obama, in a speech set for September 8, will unveil a jobs program he hopes will provide "meaningful" tax relief and help the nation's long-term unemployed, a top aide told Reuters Insider.
The Dow Jones industrial average slid 244.15 points, or 2.12 percent, at 11,249.42. The Standard & Poor's 500 Index was down 30.28 points, or 2.51 percent, at 1,174.14. The Nasdaq Composite Index dropped 66.51 points, or 2.61 percent, at 2,479.53.
Despite the day's sharp decline, stocks were only modestly lower for the week, given a rally in the first three day of trading. The Dow is down 0.3 percent, while the S&P is off 0.2 percent and the Nasdaq is nearly flat.
Losing stocks outnumbered winners on the New York Stock Exchange by more than five-to-one, while on the Nasdaq, decliners beat advancers by six-to-one. All 30 Dow components were lower, while the CBOE Volatility index rose 3.1 percent.
Bank shares were again among the day's biggest losers, with Bank of America Corp tumbling 8.6 percent to $7.23 as the Dow's top decliner. JPMorgan Chase & Co fell 4.7 percent to $34.58 and the KBW banks index lost 4.8 percent.
A U.S. regulator is suing big lenders like Bank of America Corp, JPMorgan Chase & Co and Goldman Sachs Group Inc over mortgage practices.
Energy shares dropped as U.S. crude futures fell nearly 3 percent on concerns economic weakness could curb fuel demand. Chevron Corp dipped nearly 2.6 percent to $95.97, while the PHLX Oil service sector index declined 3.9 percent.
As investors sought safer assets, gold prices climbed nearly 3 percent. Newmont Mining was the S&P's top gainer, rising 2.5 percent to $64.06.
(Editing by Jeffrey Benkoe)
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