Stocks tumbled for a second consecutive session Friday after the government’s February jobs report revealed that employers slashed payrolls last month, compounding fears that the U.S. economy is succumbing to recession.
The Dow Jones industrial average fell 146 points, bringing its two-day slide to 360.
The decline in the three major stock indexes came despite the Federal Reserve’s announcement that it would take steps to aid the credit markets.
The Labor Department’s report that employers cut jobs by 63,000 last month — the most since March 2003 — unnerved investors who were worried about the health of the economy and who had been expecting a 25,000 gain in jobs. While the unemployment rate fell to 4.8 percent, the decline reflects people leaving the labor force.
The payroll numbers arrived minutes after the Fed said it would take fresh steps to ease credit troubles, including boosting the amount of money it will auction to banks.
The central bank said it would increase the size of its March 10 and March 24 auctions to banks to $50 billion each. The auctions had been slated for $30 billion each, and Fed officials said subsequent auctions could be bigger if need be.
The Fed also said that it would begin a series of repurchase transactions expected to reach $100 billion.
Craig Peckham, an equity trading strategist at Jefferies & Co., said that besides the weak job figures, investors were worried about an apparent lack of effectiveness of the Fed’s campaign.
“There is a growing sense that the Fed is trying to pull out all the stops and use all the tools they have, but with little net effect,” he said. “It just doesn’t appear to be the quick fix that investors had been hoping for. What we’ve seen is people continuing to press very bearish bets.”
The Dow fell 146.70, or 1.22 percent, to 11,893.69.
Broader stock indicators also declined Friday. The Standard & Poor’s 500 index fell 10.97, or 0.84 percent, to 1,293.37. The Nasdaq composite index fell 8.01, or 0.36 percent, to 2,212.49.
Declining issues outnumbered advancers by nearly 2 to 1 on the New York Stock Exchange, where volume came to 1.20 billion shares.
Bond prices jumped as investors sought defensive positions amid concerns about the economy.
Wall Street had been eager for a read on the jobs picture. While unemployment remains low by historical standards, the increase in unemployment stirred concern among investors worried that it will result in a consumer slowdown.
The well-being of the consumer, whose spending accounts for more than two-thirds of economic activity, is key to investors’ hopes of avoiding more economic pain amid credit troubles and the ongoing pullback in home values.
Paul Nolte, director of investments at Hinsdale Associates, said the job losses in February weren’t surprising.
“The trend for the last year and a half has been either job losses or very small gains. … We think the economy has been in a recession for two or three months,” he said.
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