U.S. stocks fell on Friday after government data showed the labor market crumbled further in December, adding to worries about the profit outlook and a deepening recession according to Reuters. Payrolls were slashed a bit less than expected but the U.S. jobless rate climbed to its highest in nearly 16 years, further pressuring consumer spending and corporate profits. Top drags included energy shares after Chevron Corp, down 1.6 percent, joined a growing list of companies warning about their profit outlooks. Technology shares also took a beating, causing the NASDAQ to briefly wipe out its year-to-date gains amid a slide in the shares of such bellwethers as Apple Inc, off over 2 percent. "The economic numbers are going to get worse before they get better. It fits in line with the notion of about a six percent hit to GDP," said Michael Strauss, chief economist at Common fund in Wilton, Connecticut, referring to U.S. gross domestic product, which measures output of goods and services. "Does the market react to today's numbers or does it react to what today's numbers will mean for fiscal monetary stimulus and how conditions might change six to nine months from now? That's going to be the tug of war today." The Dow Jones industrial average slid 138.19 points, or 1.58 percent, to 8,604.27. The Standard & Poor's 500 Index tumbled 16.27 points, or 1.79 percent to 893.46 after being down 2 percent. The NASDAQ Composite Index plunged 41.96 points, or 2.59 percent, to 1,575.05. More bleak news on the employment front presents a major headwind for any recovery in the market. The sell-off caused the benchmark S&P 500 to trim its advance since its Nov. 21 intraday bear-market low to 18 percent. While payrolls were slashed a bit less than expected -- 524,000 people lost their jobs rather than the 550,000 seen in a Reuters poll -- December's cuts put losses for 2008 at 2.6 million, the most since 1945. When warning about its outlook, Chevron, a Dow component and the second-largest U.S. oil and gas company, cited the impact of lower energy prices on its exploration and production business. Chevron shares fell to $73.02. On NASDAQ, shares of Apple, the maker of the iPhone, dropped to $90.53. The semiconductor index was off more than 3 percent. Responding to recession's grip on the economy, U.S. President-elect Barack Obama is pushing for a new stimulus plan set to include tax cuts and major public works spending that could total nearly $800 billion.
