The Dow fell below 10,000 Friday after a sharp selloff that left all three major indexes in correction territory amid worries about a disappointing U.S. jobs report and possible default by Hungary.
"You had everyone coming into this week putting that re-risk trade back on ahead of these job numbers and they just took it right back off the table right now," Steve Grasso, a trader with Stuart Frankel, said on CNBC. "I do think we're going to deteriorate on a Friday and no one is going to step in front of that trade."
The Dow Jones Industrial Average lost 323.31, or 3.2 percent, to end at 9,931.97, its lowest close since February. Industrials led the decline, with Caterpillar and Boeing among the biggest laggards on the Dow. Materials and financial stocks also took a hit.
All three major indexes are in correction territory, defined as being down more than 10 percent from its recent high. The Dow is now down 11 percent from its April high, while the S&P 500andNasdaqare down 12 percent from those levels.
Volume was heavy, with more than 1.6 billion shares changing hands on the New York Stock Exchange. Decliners outpaced advancers, roughly 10 to 1. The CBOE volatility indexspiked more than 20 percent, topping 35.
The market's mood started off sour as a carryover from Europe as investors there worried about rumors that SocGen may be having trouble with its derivatives operations and news that Hungary is very close to defaulting on its debt.
The euro fell below $1.20against the dollar to its lowest level in more than four-years amid debt worries in the euro zone.
Piling on was the U.S. jobs report, which showed employers added 431,000 jobsto nonfarm payrolls in May, but 411,000 of those were temporary census workers. The private sector added just 41,000 jobs, well short of the more than 500,000 economists had expected. The unemployment rate, however, fell to 9.7 percent from 9.9 percent in April.
"The two areas of potential vulnerability for the economy remain payrolls and housing and they're both staggering a good deal," Art Cashin, director of floor operations at UBS, said on CNBC this morning. "From a market standpoint, I think we're going to switch over and start issuing Dow 10,000 helmets!"
Still, one encouraging sign on the jobs frontcame Thursday: Indeed.com, a search engine for job listings, reported that listings were up in all 12 industries the company tracks, with the biggest jumps in transportation, retail and hospitality listings. The company said listings should be viewed as a precursor to the official numbers as trends show up in their numbers first before the government's numbers.
Oil prices fell, settling out the week at $71.51 a barrelwhile gold rose to $1,216.20 an ounce.
BP shares fell more than 5 percent, after Standard & Poor's cut the oil firm's credit rating by one notch to AA-minus from AA, citing the challenges and costs of capping the oil wellleaking into the Gulf. Earlier this week, BP shares saw their largest intraday drop in almost 20 years.