lördag 8 september 2007

Stocks Plunge After Weak Jobs Report

"The markets are repricing for lower growth and expectations of Fed cuts."

Stocks plunged while bonds surged higher Friday after the government reported payrolls in August fell for the first time in four years rather than rising as had been expected. The Dow Jones industrial average fell more than 200 points.

Investors were unpleasantly surprised by the Labor Department's report that payrolls fell by 4,000 in August, the first decline since August 2003. The unemployment rate held steady at 4.6 percent as expected.

Wall Street has been awaiting the report as it tries to determine how well the economy is holding up under the weight of a faltering housing market, a rise in mortgage defaults and tightening availability of credit. While the report is backward looking and not predictive, investors regard it as an important reading of the economy's health.

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