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Wall St. shudders at grim global outlook

Saturday, June 02, 2012 - 01:56

June 1 - The Dow erased all its gains for the year as stocks took a beating after the weakest job growth in a year sparked concerns the effects of the European debt crisis are hurting the global economy. Conway G. Gittens reports.

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PLEASE NOTE: THIS EDIT CONTAINS CONVERTED 4:3 MATERIAL Everywhere you looked there was disappointment. U.S. job growth came in at a weaker-than-expected 69,000 in May, the smallest number in a year. And the unemployment rate inched up to 8.2 percent, the first rise in 11 months. That anemic job creation in America feeds into the trend of a global economy on the ropes. From spreading weakness across Europe to slowing factory growth in China. One of the few bright spots has been the U.S. manufacturing sector, which continued to grow last month, albeit at a slower pace. But even there, there's reason for concern: monthly sales figures from the auto makers show weaker-than-expected demand. Wall Street is giving up hope for a superhero rescue by the world's leading central banks, says Jim Bianco of Bianco Research. SOUNDBITE: JIM BIANCO, PRESIDENT, BIANCO RESEARCH (ENGLISH) SAYING: "And as people have been waiting for that the markets have not been reacting to the negative news we've seen and it really is bad out of Europe, now today with the employment number, maybe we are finally starting to see people giving it up now and that's why I think the move is appropriate that we saw a big sell-off in stocks today." Stocks were slapped down, the Dow turning negative for the year, as crisis fears gripped Wall Street. Blue chips lost 2.7 percent for the week, while the Nadaq gave up 3.2 percent. Looking at other markets: Gold reversed a recent slump enjoying its best one-day gain in 2-1/2 years. And you have to go back to the 1800s to find yields on the 10-year note at current lows. European stocks didn't provide any place to hid. Germany was down more than 3 percent, France down more than 2 percent and the UK down 1.1 percent Conway Gittens, Reuters

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Wall St. shudders at grim global outlook

Saturday, June 02, 2012 - 01:56