US stocks skidded Friday after a dire labor report showing the worst annual job losses since World War II raised alarms that the deepening recession's worst was yet to come. The Dow Jones Industrial Average tumbled 144.72 points (1.66 percent) to 8,597.74 at the closing bell and the tech-heavy Nasdaq shed 45.42 points (2.81 percent) to 1,571.59. The Standard & Poor's 500 index retreated 19.57 points (2.15 percent) to 890.16, according to preliminary closing figures. Investors turned gloomy after sifting through the blockbuster Labor Department report released before the market open. The US economy shed a massive 524,000 jobs in December, in line with market expectations, driving the unemployment rate to a 16-year high of 7.2 percent. The weak December figures capped a year of the worst job losses since 1945, the department said. The economy shed 2.6 million jobs in 2008, with the bulk of them, 1.9 million, in the last four months of the year. European stock markets closed lower on Friday, extending losses after yet more miserable data, with the US economy losing the most jobs last year since 1945 as unemployment spiked to a 16-year high. Dealers said the US figures were horrendous but had a relatively muted impact as forecasts had been for even worse data, with some suggesting the pace of job losses might even be moderating, albeit from a very high level. In Europe, a sharper-than-expected slump in German industrial output in November led a series of equally bleak figures from Britain, France and Spain, all pointing to a deep and fast accelerating manufacturing slump. Dealers noted again, however, that despite an awful series of bad news leads, the markets held up reasonably well, suggesting a measure of underlying support around current levels. In London, the London's FTSE 100 index of leading shares finished down 1.26 percent at 4,448.54 points. In Paris, the CAC 40 index lost 0.75 percent at 3,299.50 points and in Frankfurt the DAX shed 1.97 percent to 4,783.89 points. Elsewhere in Europe, the Swiss market was down 0.94 percent, Amsterdam added 0.60 percent, Milan lost 2.37 percent, Brussels slipped 0.13 percent and Madrid dropped 0.96 percent. In Asia, markets were narrowly mixed ahead of the US employment report. Tokyo fell 0.45 percent and Hong Kong was down 0.3 percent but Sydney added 1.1 percent. Meanwhile, the euro fell sharply against the dollar despite weak US unemployment figures. The European currency was also undermined by speculation about a further drop in eurozone interest rates next week, they said. In late trading here, the European single currency fell to $1.3486 from $1.3704 in New York late on Thursday. Against the Japanese unit, the dollar dropped to 90.34 yen from 91.11 yen on Thursday. The pound was at $1.5206 from $1.5230 earlier. The foreign exchange and equity markets took the news in their stride, however, as traders had already discounted the weak figures. On the London Bullion Market, the price of gold dropped to $847.25 an ounce from $855.75 late on Thursday. In New York, gold for current delivery closed at $854.30 per troy ounce Friday on the New York Mercantile Exchange, up from $853.90 late Thursday. HSBC Bank USA gave a late quote of $855.00, unchanged. The euro had earlier fallen versus the dollar in Asian deals, weighed down by expectations of an interest rate cut by the European Central Bank next week. ECB president Jean-Claude Trichet warned of a “significant deterioration in the real economy” and “the possible threat of deflation,” adding to speculation about a rate cut Thursday. Even though the eurozone slid into recession in the third quarter of 2008, retailers in the 15 countries using the euro last year saw demand pick up in November, official EU data showed on Friday. The volume of retail sales in the eurozone rose 0.6 percent in November over one month, limiting the fall over one year to 1.5 percent, the European Union's Eurostat data agency said. The eurozone counts 16 members since Slovakia adopted the single currency at the beginning of the month. Moreover, oil prices fell 2 percent on Friday after data showing a big rise in US unemployment deepened the gloomy outlook for the world's biggest oil consumer. US crude for February delivery settled down 87 cents at $40.83, with late short-covering pulling prices above earlier lows below $40. London Brent crude settled down 25 cents at $44.42. Oil prices have fallen more than $100 from a record peak of above $147 a barrel last July as the global economic downturn hits demand for fuel. OPEC producers told customers this week of bigger supply curbs this month, after OPEC agreed its biggest ever production cut in December in a bid to bolster prices.
