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Markets fall on weak US jobs data | Markets fall on weak US jobs data |
(40 minutes later) | |
Stock markets have fallen sharply as weak US jobs data added to fears of a new global economic downturn. | |
The Dow Jones opened 2% lower, while European stocks added to earlier losses as the Department of Labor said the US economy added no net jobs in August. | |
The jobs data follows manufacturing sector surveys released on Thursday which showed activity at factories worldwide dropped last month. | The jobs data follows manufacturing sector surveys released on Thursday which showed activity at factories worldwide dropped last month. |
Markets had already fallen steadily since Thursday afternoon in the US. | |
Banks hammered | |
By mid-afternoon on Friday, London's FTSE 100 was 2.9% down for the day and Frankfurt's Dax was 4% lower. | |
The London market was not helped by other data on Friday that pointed to a further slowdown in the construction sector in the UK. | |
The slump began in late trading in the US on Thursday, where the Dow Jones ended the day 1% lower, before continuing in Asia on Friday morning, where Tokyo's Nikkei fell 1.2%, and Hong Kong's Hang Seng 1.8%. | The slump began in late trading in the US on Thursday, where the Dow Jones ended the day 1% lower, before continuing in Asia on Friday morning, where Tokyo's Nikkei fell 1.2%, and Hong Kong's Hang Seng 1.8%. |
Banks were the worst performers on Friday. | |
In the UK, Lloyds fell 5.5% and Barclays 6.7%, while on the continent Commerzbank was down 5.8%, Deutsche Bank 5.7% and Societe Generale 5.8%. | |
In the US, where it has emerged that the banks will be sued by a US government home loans agency, shares in Bank of America were hammered, dropping 8% at the open, while Citibank fell 5.2%. | |
Seeking safety | |
The latest falls follow a highly volatile August, with markets globally rocked by a slew of weak economic data from the US and Europe. | The latest falls follow a highly volatile August, with markets globally rocked by a slew of weak economic data from the US and Europe. |
There were also fears over the impact of government austerity programmes, and concern at the implications of the downgrade of some governments' credit ratings, including that of the US. | There were also fears over the impact of government austerity programmes, and concern at the implications of the downgrade of some governments' credit ratings, including that of the US. |
Haven investments rallied as investors sought safety from the downturn. | Haven investments rallied as investors sought safety from the downturn. |
Gold rose 3% for the day to just below $1,880 a troy ounce, close to the all-time high of $1,913.50 set last month. | Gold rose 3% for the day to just below $1,880 a troy ounce, close to the all-time high of $1,913.50 set last month. |
The euro fell 3% against the Swiss franc, briefly touching 1.10 francs after the US jobs data release. | The euro fell 3% against the Swiss franc, briefly touching 1.10 francs after the US jobs data release. |
The Swiss authorities have repeatedly intervened to weaken their currency after the euro dropped below the 1.05 francs level last month. | The Swiss authorities have repeatedly intervened to weaken their currency after the euro dropped below the 1.05 francs level last month. |
US government debt also rallied, with the yield - the implied cost of borrowing - of the 10-year Treasury bond falling instantly from 2.13% to 2.03%, in anticipation of a possible further round of debt purchases by the Federal Reserve. | US government debt also rallied, with the yield - the implied cost of borrowing - of the 10-year Treasury bond falling instantly from 2.13% to 2.03%, in anticipation of a possible further round of debt purchases by the Federal Reserve. |
The 10-year yield briefly dropped below 2% early in August, hitting its lowest level since World War II. | The 10-year yield briefly dropped below 2% early in August, hitting its lowest level since World War II. |
Have you been affected by the current economic crisis? Would you be willing to talk to the BBC? Send your comments and experiences using the form below. | Have you been affected by the current economic crisis? Would you be willing to talk to the BBC? Send your comments and experiences using the form below. |