Dow’s 253-point drop wipes out week’s gains

Associated Press

NEW YORK

A dismal jobs report caused stocks to plunge Friday.

The Dow Jones industrial average dropped 253 points, or 2.2 percent, wiping out its gain for the week. All 30 stocks in the average fell.

No jobs were added in the U.S. last month, the government said early Friday. It was the worst employment report in 11 months and renewed fears that another recession could be on the way. The yield on the 10-year Treasury note briefly fell below 2 percent, and gold jumped $48 an ounce as cash flowed into investments seen as less risky than stocks.

The U.S. jobs news came out midday in Europe, dragging stock markets lower in afternoon trading. Indexes in Germany and France already were sinking on news that talks between Greece and international lenders over that country’s debt crisis were breaking down. Germany’s DAX closed down 3.4 percent; France’s CAC-40 lost 3.6 percent.

The lack of hiring in the U.S. last month surprised investors. Economists were expecting 93,000 jobs to be added.

The Labor Department’s report relies on data collected from surveys of households and businesses in the second week of August. That’s right after Standard & Poor’s removed the country’s AAA credit rating and fears mounted that Europe’s banking crisis could spread to the U.S. Television screens were filled with images of riots in London.

The Dow Jones industrial average lost 253.31 points to close at 11,240.26.

The Standard & Poor’s 500 index fell 30.45, or 2.5 percent, to 1,173.97.

The Nasdaq composite fell 65.71, or 2.6 percent, to 2,480.33.