U.S. stocks today fell back into bear territory, or 20% below their October 2007 peaks, amid fears that the Labor Departments August employment report slated for release early Friday will come out weaker than expected.
The Dow Jones industrial average closed down 345.22, or 2.99%, at 11,187.66; the S&P 500 fell 38.17, or 2.99%, ending at 1,236.85; and the Nasdaq composite closed down 74.69, or 3.2%, at 2,259.04. All numbers are preliminary.
With todays broad sell-off, the major equity indexes were back into bear territory, below 11,331.63 for the Dow, 1,252 for the S&P, and 2,287 for the Nasdaq Composite.
The losses on Wall Street extended the losing streak in Asia and Europe, which were tied to expectations of a global economic slowdown.
The market sold off from the open, as the Labor Department reported that jobless claims jumped 15,000 to 440,000 a level historically consistent with a recession in the week ended Aug. 30. Also, Roseland, N.J., payroll company ADP estimated in its latest survey that the U.S. private sector shed 33,000 jobs in August. The two reports stoked fears that Fridays data may come in below forecasts for a drop of 75,000 payroll jobs and a 5.7% jobless rate.
Whether ADP and the government are capturing the true state of the job market is an open question. It is likely that both are overstating the actual job count, with both assuming too great an increase in net business formation, said Tony Crescenzi, chief bond market strategist at Miller Tabak.
There was also some market talk that some commodities funds that have performed poorly recently were selling other assets to make up for the losses.