US stocks fall ahead of jobs report

A period of relative calm on Wall Street ended today as stocks tumbled in the final hour of trading on growing investor anxiety about the government’s November employment report.

The major indexes each fell more than 2.5%, including the Dow Jones industrial average, which dropped nearly 216 points after rising in seven of the last eight sessions.

It was clear that investors were worrying that tomorrow’s employment report would show a further deterioration in the job market. Employers have already cut 1.2 million jobs in the year to October, leaving the unemployment rate at a 14-year high of 6.5%. Economists expect the US Labor Department will report that the jobless rate rose to 6.8% in November and that companies cut another 320,000 jobs.

“It’s all about jobs and right now the outlook is pretty downbeat,” said Alan Skrainka, chief market strategist with Edward Jones in St Louis.

The late-session decline followed a decent run for stocks, which closed higher in seven of the previous eight sessions. It also came as the heads of the Detroit carmakers appeared before Congress with hopes of persuading sceptical lawmakers to save their troubled industry.

While the market expects the Detroit companies will be able to win some aid from Capitol Hill, support for the troubled companies was not assured.

General Motors Corp, Ford Motor Co and Chrysler LLC are collectively seeking $34bn (€26m) in emergency aid.

The Dow Jones industrial average fell 215.45, or 2.51%, to 8,376.24.

Among the carmakers, GM fell 79 cents, or 16%, to 4.11 dollars, while Ford fell 19 cents, or 6.7%, to 2.66 dollars. Chrysler is not publicly traded.

Yesterday, Wall Street looked past another stream of bad economic news and finished sharply higher after fluctuating between positive and negative territory for most of the day.