Money World economy
The Dow Jones industrial average and the Standard & Poor's 500 index posted their biggest drops in three months after reports on manufacturing and the labour market rattled the market, overshadowing good news on housing and consumer spending. The Dow tumbled 203 points and bond prices jumped as investors sought a safer place for their money.
It was the sixth drop in seven days for stocks and another reminder of how fragile the market's 50% gain since March has become. The mixed economic reports added urgency to questions about how strong the recovery really is, and ratcheted up investors' anxiety ahead of the Labour Department's closely watched monthly jobs report today.
"Fear is still very, very fresh in people's minds and the magnitude of the potential disaster that we had last September through March, I think still has investors pretty skittish," said Darell Krasnoff, managing director of Bel Air Investment Advisors in Los Angeles. "So our sense is that some bad news can shift sentiment pretty quickly."
The stock market's mood darkened after the Institute for Supply Management said its index of manufacturing activity in September slipped to 52.6 from 52.9 in August. The number fell short of analysts' expectations.
The Dow fell 203.00, or 2.1%, to 9,509.28. The drop was the biggest fall for the Dow since July 2, when it fell 223 points, or 2.6%, after the government said the nation's unemployment rate had reached the highest level in decades.
