U.S. stocks slide on payroll job losses

U.S. stocks retreated today as the employment report for August showed U.S. payrolls unexpectedly losing 4,000 jobs, the first loss since 2003 and more evidence of an economic slowdown spreading beyond the housing and mortgage sectors.
In a further sign of economic weakness, payrolls added 81,000 fewer jobs than previously reported in June-July.
The report was bleaker than the Federal Reserve’s Beige Book assessment released only two days ago, which cited the “limited” impact of the summer’s financial turmoil on the economy.
The Dow Jones industrial average fell 249.97, or 1.87%, to 13,113.38, while the S&P 500 dropped 25, or 1.69%, to 1,453.55 and the Nasdaq was down 48.62, or 1.86%, to 2,565.7. All numbers are preliminary.
While the job losses make the case for a cut in the federal funds rate at the Sept. 18 Fed meeting, most market participants now see such move as lagging current conditions.
“Whatever the Fed thinks, it knows it’s confused,” said Robert Brusca, chief economist at the independent research firm FAO Economics.
“We were worried about services job weakness, but job losses overwhelm manufacturing. It’s not a pretty picture if you are a central banker.”