Stocks slammed by gloomy jobs report

Brendan Mcdermid / REUTERS

Traders work on the floor of the New York Stock Exchange.

By msnbc.com news services

Stocks fell sharply Friday after dismal jobs data reinforced the view that the economy is stuck in a slow-growth rut.

The market saw its worst decline since June 21, knocking the Dow Jones industrial average down 124 points by the close of trading. The index fell as much as 194 points earlier in the session.

Stocks saw their worst weekly performance in over a month.

News that the world's largest economy created just 80,000 jobs in June -- far fewer than needed to lower the 8.2 percent unemployment rate -- added to evidence that Europe's debt crisis is weighing on global growth.

The report followed other data this week that U.S. manufacturing shrank in June and service sector growth slowed to its lowest level since January 2010, which spurred speculation the Federal Reserve may take more action to stimulate the economy.

Though Fed action might cheer some investors, many others are starting to doubt the ability of central banks to lift the economic gloom. Moreover, Friday's jobs number might not be weak enough to prompt action by the Fed.

"The market is really focused on economic numbers that were less than desirable and it has just been off all day," said Stephen Carl, head equity trader at The Williams Capital Group LP in New York.

Related: Gloomy jobs data raises pressure on the Fed

"I don't think they (the Fed) want to quite do things right yet, but they certainly potentially can breathe life back into things. But you always know that it's not necessarily always the answer."

German markets regulator BaFin is conducting a special probe of Deutsche Bank as part of a wider investigation into possible manipulation of the London Inter Bank Offered Rate (Libor), Reuters reported, citing two people familiar with the matter.

Spanish government bonds rose to levels seen as unsustainable a day after the European Central Bank cut rates to a record low, and China and Britain also loosened monetary policy.

Shares of Informatica Corp plunged after the data-integration software maker forecast a weak second quarter hurt by delayed contracts.

Networking shares took a hit after gear maker Acme Packet Inc forecast second-quarter results below expectations on continued weakness in the North American telecom service provider market.

Skyrocketing sales of the Galaxy smartphone drove a record quarterly profit of $5.9 billion at Samsung Electronics. This is likely to stretch the firm's lead over rivals Apple and Nokia.

Reuters contributed to this report.

Reaction on today's market selloff.

Source: http://marketday.msnbc.msn.com/_news/2012/07/06/12602609-stocks-slammed-by-gloomy-jobs-report?lite

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