Stocks saw significant losses to close out the week on Friday, as worries regarding the escalating European debt crisis, the prospects of growth in the U.S. labor market and the oil spill in the Gulf of Mexico generated significant selling pressure. The major averages all closed firmly lower, with the Dow closing below the 10,000 level.
After seeing initial weakness, sharpened their losses as the euro continued to fall today amid fears of debt contagion within the European Union. The euro-zone currency fell as low as $1.1955 against the dollar earlier, its lowest level in over four years.
Worries about Hungarian debt spooked traders after the vice chairman of Hungary's ruling Fidesz party indicated that the nation is facing a debt-crisis much akin to that of Greece. Spain and Portugal also remain areas of concern as the markets wait for the next shoe to drop.
Back in the U.S., anxieties over the labor market also helped to drive stocks lower, as a jump in May employment reported by the Labor Department was largely attributed to the hiring of temporary census workers.
The day's data showed that non-farm payroll employment increased by 431,000 jobs in May following an unrevised increase of 290,000 jobs in April. The job growth fell short of economist estimates for an increase of about 500,000 jobs.
While the increase in jobs in May marked the fastest pace of job growth since March of 2000, the increase was primarily due to the addition of 411,000 temporary employees to work on the census. At the same time, the private sector added only 41,000 jobs in May.
On the corporate front, BP Plc (PB) remained in focus after the company was able to cap the well spilling oil into the Gulf of Mexico. Nonetheless, the degree of success of the latest measure remains uncertain.
The major averages all saw additional losses in late-session dealing, closing near their worst levels of the day. The Dow plunged by 323.31 points or 3.2 percent to 9,931.97, the Nasdaq fell by 83.86 points or 3.6 percent to 2,219.17 and the S&P 500 slid by 37.5 points or 3.4 percent to 1,064.88.
With today's drop, the major averages erased all of the gains registered earlier this week, seeing steep weekly losses. The Dow and the S&P 500 fell by 2 percent and 2.3 percent, respectively, while the Nasdaq declined by 1.7 percent for the week.
Sector News
Commercial real estate stocks saw some of the day's steepest losses, prompting at 5.8 percent drop by the Morgan Stanley REIT Index. The decline dragged the index down to a three-month closing low.
Defense stocks were also under pressure, driving the Philadelphia Defense Sector Index down by 4.2 percent. With the slide, the index closed at a three and a half month closing low.
Significant weakness was also visible in most of the other sectors, reflecting broad based selling pressure. Transportation, steel, networking, and housing stocks posted particularly steep losses.
Dow Components
Caterpillar (CAT) was the leading decliner in the Dow, falling by 5.5 percent. With the slide, the stock closed at its lowest price in just over three months.
Boeing (BA) also registered a steep loss, with shares of the airplane manufacturer sliding by 4.9 percent. The drop pulled the stock down to its lowest closing price in three and a half months.
American Express (AXP), Alcoa (AA), General Electric (GE) and Intel (INTC) were some of the other leading decliners in the Dow as all 30 blue chips saw losses on the day.
Verizon (VZ) saw the thinnest percentage pullback in the Dow, posting a loss of 1.6 percent, offsetting some recent gains.
Other Markets
Overseas, stock markets across the Asia-Pacific closed on a mixed note Friday. Honk Kong's Hang Seng Index was nearly flat, Japan's benchmark Nikkei 225 Index edged down by 0.1 percent and India's BSE 30 Index gained 0.6 percent.
Meanwhile, the major European markets ended the day sharply lower. The French CAC 40 Index slid by 2.9 percent, while the U.K.'s FTSE 100 Index and the German DAX Index fell by 1.9 percent and 1.6 percent, respectively.
In the bond markets, treasuries rallied amid the weakness on Wall Street. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, closed at 3.195 percent, posting a loss of 18.4 basis points.
Looking Ahead
Next week, data on jobless claims, the trade balance, retail sales and consumer sentiment is likely to guide movement in the markets.
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May 01, 2026 15:54 ET Central banks dominated the economics news flow this week with almost all major ones announcing their latest policy decisions and many boosted expectations for a rate hike in June. In other news, several countries released the preliminary data for first quarter economic growth. In the U.S., comments by Fed Chair Jerome Powell were also in focus as his term ends this month.