Wall Street ended its worst week this year with a sharp sell off on Friday after a slowdown in job creation in the world’s top economy raised the biggest question mark yet about the prospects for US growth
Employers reduced hiring for the third straight month, adding 115,000 workers in April, well below forecasts of 170,000. Traders’ expectations had fallen during the week, but the softer jobs number missed even more pessimistic forecasts.
Energy shares were the worst performers, with the S&P energy index .GSPE down 2.2 percent on fears a worsening economy would sap demand. Oil fell 4 percent, dropping below $100 a barrel for the first time since February.
The sharp retreat this week was a blow to investors who had been hoping the S&P 500 would break out to new recovery highs. The index is now moving away from strong resistance at the 1,400 level after failing to make a convincing move above it.
“When we entered the second quarter, we thought it would be a consolidation/correction quarter for the market simply because it was overbought, over-believed, and we saw economies were not improving, and that is still the case,” said Bruce Bittles, chief investment strategist of Robert W. Baird & Co in Nashville. For the week, the S&P 500 lost 2.4 percent, its worst weekly performance since December. Investors were also cautious ahead of elections in and Greece over the weekend as European policymakers struggle to bring an end to their debt crisis and people rebel against the strain of austerity measures. The utility sector index .GSPU, considered a defensive play, was the only S&P 500 sector in positive territory, up 0.2 percent. Shares of CenterPoint Energy () led, up 1.7 percent at $20.05.
The Dow Jones industrial average dropped 168.32 points, or 1.27 percent, to 13,038.27 at the close. The Standard & Poor’s 500 Index lost 22.47 points, or 1.61 percent, to 1,369.10. The Nasdaq Composite fell 67.96 points, or 2.25 percent, to 2,956.34.
The selloff came on the highest volume in two weeks. Around 7.02 billion shares were traded on the NYSE, the and the NYSE Amex, above the daily average of 6.76 billion. On the NYSE, decliners outnumbered advancers by a ratio of 3 to 1. On the Nasdaq, four stocks fell for every one that rose.
In the oil sector, Chevron Corp () dropped 2.1 percent to $103.72 while Exxon Mobil Corp () slipped 1.3 percent to $84.57. Both ranked among the Dow’s top losers, along with other big names in economically sensitive sectors.
With this week’s retreat, much of the S&P 500’s gains from the move off the April closing low at 1,358.59 have been erased. The market has found support around that level in the past, but a breach there could take it back to 1,340.
