Stocks slumped on Monday, bringing the losing streak to four straight days after investors reacted to Friday’s disappointing U.S. jobs report, which called into question the strength of the economic recovery.
The Dow Jones industrial average closed at 12,929.59, down 130.55 points, or 1 per cent – marking its first close below 13,000 since March 12. The broader S&P 500 closed at 1,382.20, down 15.88 points, or 1.1 per cent. In Canada, the S&P/TSX composite index closed at 12,018.50, down 84.61 points, or 0.7 per cent.
The declines follow Friday’s report from the U.S. Labour Department, which showed that employers added just 120,000 jobs in March, 85,000 below what economists had been expecting and about half the gains delivered in February. The disappointment marks a shocking exception to what has been a stream of upbeat economic reports in recent months, and raises the question whether the U.S. economy might still be floundering.
All 10 subindexes within the S&P 500 finished the day lower, suggesting the selloff was broad. However, economically sensitive areas were hit the hardest, with financials, industrials and materials taking the worst beating. Bank of America Corp. fell 3.3 per cent, Caterpillar Inc. fell 2.2 per cent and General Electric Co. fell 1.5 per cent.
There were some bright spots, though. AOL Inc. surged 43.3 per cent after it struck a $1-billion (U.S.) deal to sell 800 patents to Microsoft. Investors felt that struggling Research In Motion Ltd. might also be able to make a patent deal, sending the BlackBerry maker’s shares up 2.9 per cent.
Among commodities, crude oil fell to $102.46 a barrel, down 85 cents. That weighed on energy producers: Suncor Energy Inc. fell 0.5 per cent and Canadian Oil Sands Ltd. fell 0.8 per cent.
Gold held up, though, rising to $1,643.90 an ounce, up $13.80. That helped gold producers: Barrick Gold Corp. rose 0.7 per cent.
U.S. governments also resumed their role as safe-haven investments. The yield on the 10-year U.S. Treasury bond fell for a fourth straight day, to 2.045 per cent. Last week, the yield was close to 2.3 per cent. As yields fall, bond prices rise.