Investing.com - U.S. stocks moved lower Friday for the second day, as poor labor data pointed to further stagnation in the U.S. economy and a possible new round of economic stimulus from the Federal Reserve Bank.
In afternoon U.S. trade, the Dow Jones Industrial Average dropped 2.1% to 11,251.10, the Nasdaq Composite Index fell 2.58% to 2,480.31, and the S&P 500 gave up 2.48% to trade at 1,174.54.
A U.S. Labor Department report released earlier Friday, showed that non-farm payrolls remained flat in August after a 85,000 rise in the previous month.
Market expectations were for non-farm payrolls to increase by 74,000 in August.
Unemployment held steady at 9.1% in August, mirroring the July figure and in line with economist’s forecasts, according to the Labor Department report.
The White House’s Office of Management and Budget, on Thursday, forecast that unemployment would average 8.8% this year, down from an earlier estimate of 9.3%.
The office added that the federal budget deficit would fall to USD1.32 trillion in 2011, down from the USD1.64 trillion estimated in the 2012 fiscal budget.
Shares on Wall Street fell as much as 250 points following release of the labor numbers, as investors had hoped for an improvement in labor conditions following a dismal August that saw European debt woes unresolved and a first-ever downgrade of the U.S. credit rating.
All 30 Down components lost ground including Bank of America Corp. and JP Morgan Chase, whom the New TImes reported could soon be the target of a lawsuit from the Federal Housing Finance Agency over mortgage securities.
Bank of America Corp. plunged 8.7% while JP Morgan Chase dropped 4.2%.
Netflix Inc. plummeted 9% after Starz Entertainment revealed it was suspending negotiations to continue providing streaming service to the movie rental company.
Starz parent company, Liberty Media Corp. was down 1.1%.
Representatives of United Airlines’ flight attendant’s union began contract talks with United Continental Holdings Inc. on a new contract agreement.
United Continental Holdings Inc. shares were down 2.1% in afternoon trade.
U.S. markets were to be closed next Monday for the Labor Day Holiday.