Fears of faltering economy push markets sharply lower

NEW YORK – Stocks plunged Friday after the government reported that hiring slowed sharply last month. The report confirmed investors’ fears that the U.S. economic recovery is faltering.

The losses in the market were widespread. The Dow Jones industrial average lost 168 points and the Nasdaq composite had its worst day since Nov. 9. Both the Nasdaq and the Standard & Poor’s 500 index closed out their worst weeks of the year. The Dow had its second-worst.

The dollar and U.S. Treasury prices rose as investors dumped risky assets and moved money into lower-risk investments. Energy stocks were among the hardest hit after the price of oil fell sharply and settled below $100 a barrel for the first time since February. Only one of the 10 industry groups in the S&P 500 rose, utilities, which investors tend to buy when they’re nervous about the economy.

“The jobs numbers were a disappointment,” said Phil Orlando, chief equity strategist at Federated Investors. He noted that there were several factors distorting the month’s figures including unusually warm weather in the first three months of the year and an early Easter.

Oil price drops to lowest level in nearly six months

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The price of oil plunged to its lowest level in nearly six months Friday, falling below $100 per barrel for the first time since February. A drop in gasoline prices can’t be far behind.

It’s a welcome trend for motorists, with the summer driving season just around the corner. And it eases some pressure on the U.S. economy, which has shown only agonizingly slow growth in the nearly three years since the Great Recession ended.

Oil fell $4.05, or 4 percent, to $98.49, after a weak U.S. jobs report offered the latest evidence that the global economy is weakening, possibly reducing demand for oil. At the same time, there is mounting evidence that world oil supplies are growing.

“The jobs report was the coup de grace,” said Judith Dwarkin, chief energy economist at ITG Investment Research. “But it’s hard to see how prices could have stayed on the boil given ample supplies and continued economic uncertainty.”

For the week, oil fell more than $6 and is now about $12 below its February high. U.S. gasoline prices have fallen to $3.80 per gallon from a peak of $3.94 in early April.

New Keystone application changes Nebraska route

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The Canadian company trying to build the disputed Keystone XL pipeline in the U.S. submitted a new application for the project Friday after changing the route to avoid environmentally sensitive land in Nebraska.

TransCanada said it applied again to the State Department for permission to build the pipeline to carry oil from tar sands in western Canada to a company hub in Steele City, Neb. From there, the project would link up with other pipelines operated by the company to carry oil to refineries on the Texas Gulf Coast.

President Barack Obama blocked the pipeline earlier this year, citing uncertainty over the Nebraska route – a decision that drew fire from Republicans and industry groups.

Calgary-based TransCanada had proposed a new route last month that would veer east around the groundwater-rich Sandhills region.

— From news service reports


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