ECON - U.S. Job losses hit shares

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BBC - Thursday, 3 May, 2001, 18:16 GMT 19:16 UK

US job losses hit shares

A sell-off by New York traders drags Europe down

Fears the US economy was weakening faster than expected pushed the Dow and the Nasdaq down, dragging European markets with them.

Weekly jobless claims were stronger than expected and weakness in the US service sectors, highlighted by a second straight fall in the National Association of Purchasing Managers (NAPM) non-manufacturing index gave the markets a fright.

The benchmark Dow index of 30 leading stocks closed 80 points lower at 10,796, while the technology stock dominated Nasdaq was 74.5 points lower at 2,146.

London's benchmark Ftse 100 had one of its worst days in recent weeks, closing 138.4 points or 2% lower at 5,765.8.

The picture was just as bleak across the channel, with the French Cac 40 index closing 116 points down at 5,457 and Germany's Dax down 124.6 points at 6,089.1.

US fears

Wall Street was spooked after the government reported weekly jobless claims had climbed ahead of forecasts in the week ending April 28, to their highest level since the week of March 23, 1996.

In a further signal that the labour market was weakening, job cuts announced by US companies hit a record high in April, the highest since the survey began in 1993, according to the outsourcing firm Challenger, Gray & Christmas.

Adding to the gloom was an indication that the weakness in manufacturing was spreading to other sectors, as well.

The National Association of Purchasing Management (NAPM) said its monthly non-manufacturing index, which measures the service sector of the economy, fell to 47.1 in April from 50.3 in March. A number below 50 denotes contraction.

The markets will be watching the key US non-farm payroll data that will be released on Friday.

Economists polled by Reuters have forecast that 5,000 new jobs were created in April after a loss of 86,000 jobs in March.

A figure below the forecast would add to fears the US economy could be heading for recession.

-- Anonymous, May 04, 2001


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