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NEW YORK: Wall Street fell hard on Thursday after a government report highlighted a weak labour market that could hinder prospects for recovery from the brutal recession.
The Dow Jones Industrial Average plunged 223.32 points (2.63 percent) to end the holiday-shortened week at 8,280.74 after trading was extended by 15 minutes to cope with what the New York Stock Exchange called "system irregularities."
The Nasdaq fell 49.20 points (2.67 percent) to 1,796.52 and the Standard & Poor's 500 broad market index tumbled 26.91 points (2.91 percent) to 896.42.
The market opened on a sour note ahead of a long weekend after the Labour Department reported that US employers shed 467,000 jobs in June, pushing the unemployment rate to a fresh 26-year high of 9.5 percent.
Analysts had expected a smaller number of 365,000 job losses, but a higher unemployment rate of 9.6 percent. The jobless rate in May was 9.4 percent.
"The June payroll report presents lousy economic news in virtually every respect," said Patrick O' hare of Briefing.com.
"It is so bad that it could undermine hopes that an economic rebound is not too far away simply because other economic series have showed a slowing rate of decline," he said.
The report "caused traders some alarm and led to creeping doubts as to whether a rapid recovery in the economy is still possible," analysts at Charles Schwab & Co said in a note to clients.
It is "doing little to soothe concerns on Wall Street that the road to an economic recovery may be bumpy and longer than the recent rally in equities in second quarter had suggested," they said.
The market reacted to the larger-than-expected non-farm payrolls number rather than the smaller than expected increase in the jobless rate, said Scott Marcouiller, senior equity market strategist at Wells Fargo Advisors.
A relatively positive data on US factory orders - which increased 1.2 percent in May - hardly impacted the market as traders wound down for a long weekend. Friday is a holiday for the July 4 Independence Day celebration.
Among losing stocks was power producer Exelon, falling 4.25 percent to 49.37 dollars as it raised its hostile takeover bid for NRG Energy by 12 percent to 7.45 billion dollars.
NRG Energy fell 4.80 percent to 24.80 dollars.
A decline in oil prices also took a toll on energy stocks, with ExxonMobil, down 2.93 percent to 68.49 dollars and Chevron shedding 3.16 percent to 64.42 dollars.
Aviation giant Boeing ended 3.32 percent lower to 40.83 dollars after reporting delivery of 125 civilian aircraft in the second quarter, little changed from the 126 in the same period a year ago.
Johnson & Johnson fell 1.91 percent to 55.98 dollars as it was announced that the pharmaceutical giant will take a 18.4 percent stake in Irish biotechnology company Elan for one billion dollars.
Bonds rose. The yield for the 10-year US Treasury bond fell to 3.495 percent from 3.544 percent on Wednesday while the yield on the 30-year bond dropped to 4.317 percent from 4.347 percent. Bond yields and prices move in opposite directions. - AFP/de
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