Stocks Plunge on Weak Jobs Report

NEW YORK (TheStreet) -- U.S. stocks were punished Friday after the government said the economy added far fewer jobs than expected, adding to concerns about a global slowdown.

The Dow Jones Industrial Average lost 275 points, or 2.2%, to close at 12,118, not far above a session low of 12,107. The blue-chip index, which is now negative for the year, endured its biggest one-day point drop of 2012.

The S&P 500 dropped 32 points, or 2.5%, to finish at 1278, breaking below 1280 for the first time since Jan. 13. The index has now slipped into correction territory, declining 10% from an intraday high of 1422 on April 2.

The Nasdaq shed 80 points, or 2.8%, to settle at 2747. The index has now dropped 12.3% since hitting its high for the year of 3134 on March 27.

Friday's selloff follows a dismal May when all three major U.S. equity indices lost more than 6% amid increasing uncertainty about the stability of the eurozone as first Greece and more recently Spain have come under financial stress. Year-to-date, the Dow is now down 0.8%, while the S&P 500 is up 1.6%, and the Nasdaq is holding a 5.5% gain.

All 30 Dow components were in the red. The biggest percentage decliners within the blue chips were American Express(AXP) , Bank of America(BAC) and Hewlett-Packard(HPQ) , all of which were losing more than 4%.

Shares of HP, which announced a major restructuring last week when it reported its fiscal second-quarter results, fell more than 6% after Jefferies downgraded the stock to hold and lowered its price target to $23 from $30. The firm said it expects most of HP's businesses to be challenged in the medium term.

"Specifically we think tablets will hurt PCs (and Windows 8 will not help), smartphones will hurt printers, and European uncertainty will hurt enterprise IT spending," Jefferies said.

In the broader markets, losers outpaced winners by a 6-to-1 ratio on the New York Stock Exchange and by a more than 5-to-1 ratio on the Nasdaq.

The Labor Department said early Friday the economy added 69,000 jobs in May, well below the 150,000-plus jobs economists were expecting.

The private sector added 82,000 jobs, compared to market expectations of 164,000.

The unemployment rate ticked up to 8.2%. Economists were expecting the rate to remain steady at 8.1%.