Stocks swoon again; Dow falls 213 points

By msnbc.com news services

Wall Street stocks suffered their worst five-day stretch in nearly five months on Tuesday, stung by worries about slowing U.S. job growth, and oil prices slid more than 1 percent on worries about weakening demand from China.

Signs of a cooling U.S. recovery after Friday's release of disappointing data on jobs creation in March and the euro zone's festering debt crisis fueled a view of tepid global growth, stoking safety bids for gold as well as U.S. and German government debt.

"The bad news on employment brought about more doubt about the global recovery and how vulnerable we are to the double-dip (recession)," said William Larkin, fixed income portfolio manager at Cabot Money Management in Salem, Massachusetts.

Oil prices closed down below $120 a barrel in London after China, the world's second largest oil consumer, reported a decline in imports of crude oil in March, raising concerns about its oil demand and a slowdown in the Chinese economy. Crude prices recorded their biggest one-day drop in almost four months.

On Wall Street, the benchmark S&P recorded its fifth straight session of losses, and all three major indexes fell below key support levels.

During the current downdraft, the S&P has lost 4 percent and hit its lowest level in a month. It touched a four-year high last Monday and is still up 8 percent for the year to date.

"The market is trying to figure out whether or not this selloff has run its course," said Robert Pavlik, chief market strategist at Banyan Partners LLC in Palm Beach Gardens, Florida. "I think the near term focus is really a question of have we stabilized heading into the start of earnings season."

Tuesday's decline came on the cusp of the start of the first-quarter earnings season.

"The bar has been set low for the earnings season so I think earnings will be a catalyst for the market to move higher. The recent decline is just digesting the uninterrupted rally we've had," said JJ Kinahan, chief derivatives strategist for TD Ameritrade in Chicago.

According to preliminary reports, the Dow Jones industrial average fell?213.20 points, or 1.65 percent, at 12,715.93. The Standard & Poor's 500 Index tumbled?23.61 points, or 1.71 percent, at 1,358.59. The Nasdaq Composite Index dropped?55.86 points, or 1.83 percent, at 2,991.22.

Apple had initially bucked the day's downward trend but later reversed course. Its shares hit a new high of $644, driving its market capitalization to briefly top $600 billion, before turning lower to trade down 1.1 percent at $629.00

European shares hit a 10-week low on Tuesday on the first trading day after the four-day Easter weekend. Financials, miners, automakers and energy sectors bore the brunt of the sell-off, reacting to Friday's weak U.S. jobs report and data released on Tuesday showing no growth in France's economy in the first quarter.

The FTSEurofirst 300 index of top European shares finished down 2.48 percent at 1.026.15 points. The index has fallen more than 7 percent since hitting an eight-month high in mid-March and is up just 2.7 percent so far this year.

The broad weakness in equities knocked the MSCI global stock index down for a sixth consecutive session. It lost 1.46 percent and fell to its lowest level since early February.

In the currency market, the euro fell 0.2 percent versus the dollar to $1.3080, near a one-month low of $1.3033 set on Monday. Against the yen, the euro was down 1.2 percent at 105.59 yen after an earlier low of 105.51 yen - its lowest level against the yen since Feb. 22.

Both Spanish and Italian yields spreads over German Bunds widening, extending their moves from last week when the U.S. jobs numbers added to concerns about the global economic outlook. The rising risk premiums on Spanish and Italian debt reflect renewed worries about the ability of Italy and Spain, the euro zone's third and fourth biggest economies, to repay their loans.

Benchmark 10-year Treasury notes last traded up 15/32 in price with a yield of 1.993 percent, the lowest level in about four weeks.

German Bund futures were up 1.20 percentage points at 140.35, their highest level since March 7.

In oil trading, Brent crude settled down 2.27 percent at $119.88. U.S. oil fell $1.20 or 1.2 percent to $101.26 a barrel.

Spot gold clung to gains in choppy trading. It was last up 1.2 percent at $1,660.30 an ounce.

Reuters contributed to this report.

Mark Kajita, Baker Boyer National Bank and Sandy Lincoln, BMO Asset Management, weigh in on another big down day for stocks and whether a correction is bubbling.

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