Market Recap: Dismal Jobs Report Sends Markets Into Freefall

Markets got crushed today:

▼ Dow: -2.22 percent

▼ Nasdaq: -2.82 percent

▼ S&P: -2.46 percent

Precious metals:

▲ Gold: up +3.8 percent to $1,621.20 (up from $1,559.65) an ounce

▲ Silver: up +2.45 percent to settle at $28.37

Commodities:

▼ Oil: -3.62 percent

Markets were down because:

The stock market suffered its worst day of the year Friday after a weak report about hiring and employment cast a pall of gloom over the U.S. economy. The Dow Jones industrial average plunged 275 points.

Traders stampeded into the safety of bonds, pushing the yield on the benchmark 10-year Treasury note to a record low. Fearful investors bought gold, causing the price to spike $50 an ounce, and concern about a global economic slowdown drove the price of oil to its lowest since October.

It was the Dow's steepest one-day drop since November.

The Standard & Poor's 500 index and Nasdaq composite index both fell more than 3 percent. The Nasdaq has dropped more than 10 percent since its peak - what traders call a market correction. The S&P 500 is just a point above correction territory.

American employers added just 69,000 jobs in May, the fewest in a year, and the unemployment rate increased to 8.2 percent from 8.1 percent. Economists had forecast a gain of 158,000 jobs.

The report, considered the most important economic indicator each month, also said that hiring in March and April was considerably weaker than originally thought.

Earlier data showed weak economic conditions in Europe and Asia, too. Unemployment in the 17 countries that use the euro currency stayed at a record-high 11 percent in April, and unemployment spiked to almost 25 percent in Spain.

There were signs that growth in China, which helped sustain the global economy through the recession, is slowing significantly. China's manufacturing weakened in May, according to surveys released Friday.

The Dow closed down 274.88 points, or 2.2 percent, at 12,118.57. The Dow is off 0.8 percent for the year; two months ago, it was up more than 8 percent for the year.

The Standard & Poor's 500 index fell 32.29 points, or 2.5 percent, to 1,278.04. The Nasdaq dropped 79.86, or 2.8 percent, to 2,747.48. Both indexes are still up for the year - 1.6 percent for the S&P 500 and 5.5 percent for the Nasdaq.

Gold for August delivery climbed $57.90, nearly 4 percent, to $1,622.10 per ounce.

May was the worst month for the stock market in two years by some measures. Investors' worries about Europe's debt crisis intensified as the month wore on. Greece's political future is uncertain, and it appears increasingly likely to stop using the euro currency. That could rattle financial markets and make Greece's economy - already hobbled - even weaker.

Several analysts raised the possibility that the weakening economy will prompt more action by governments and central banks seeking to juice global economic activity. Anticipation of some policy response prevented even deeper losses, Stovall said.

The Federal Reserve undertook programs in 2009 and 2010 to buy U.S. government bonds. Its goal was to lower interest rates and encourage people to buy riskier investments like stocks. At least in public, the central bank so far has resisted a third round of purchases, known as quantitative easing.

Only 17 of the 500 companies in the S&P index were higher for the day.

The Associated Press contributed to this report.