Global growth, US job fears hammer Wall Street

NEW YORK - Wall Street had its steepest decline in more than two months on Thursday, as more signs of weakness in the labour market and increasingly sluggish growth overseas fuelled fears about the ability of the US economy to stage a recovery.

The sour mood was set early in the session, after weekly government data showed an unexpected jump in the number of filings for jobless benefits, while a report by ADP Employer Services showed private employers cut 33,000 jobs in August.

The data fueled investor nervousness ahead of the government's key August non-farm payrolls report, and losses cascaded in afternoon trading. The Dow fell more than 340 points and only one of its 30 components escaped the sell-off.

Construction and mining equipment maker Terex Corp compounded the gloom when it cut its 2008 sales and profit forecast, citing weak demand in Western Europe and North America. Top drags included economic bellwethers Caterpillar and General Electric.

Financial stocks were also hammered, after Bill Gross, the manager of the world's biggest bond fund, Pimco, said that to halt what he called 'a financial tsunami' the US government should give the Treasury the right to buy debt and other assets. Mr Gross said he was staying on the sidelines of the markets.

The Dow Jones industrial average fell 344.65 points, or 2.99 per cent, to 11,188.23, while the Standard & Poor's 500 Index dropped 38.15 points, or 2.99 per cent, to 1,236.83. The Nasdaq Composite Index tumbled 74.69 points, or 3.20 per cent, to 2,259.04.

Source: Singapore Business Times - 05 Sep 2008