Stock Market Closes Dismal May Month
The stock market saw a dismal ending to the month of May, despite the highly anticipated Facebook IPO, which ended in a bust for the social networking site.
The Dow Jones lost a total of 820 points for the month of May, its worst showing since May 2012, when investors were spooked by a one-day “flash crash” that occurred when a large trade overwhelmed computer servers, according to The Columbus Dispatch.
Several factors led to the month’s slump, including an increased unemployment rate, less companies hiring, and also the looming European debt crisis.
Daily Finance reports that employers in the U.S. added only 69,000 jobs in the month of May, much lower than the forecast of 158,000, and also the fewest jobs added in a year. Sam Stovall, the chief equity strategist at S&P Capital IQ, a market research firm, stated:
“The big worry now is that this economic slowdown is widening and accelerating.”
According to Star News Online, the weak report about jobs sent traders in the stock market into a frenzy of selling more risky stocks and picking up U.S. government bonds, a much safer investment. Bond prices rose very sharply, and the yield on the benchmark U.S. Treasury 10-year note fell to its lowest on record, 1.46 percent.
Gold prices also rose higher, raising $37 per ounce to a new price of $1,601. Gold buying has become a safety net during turbulent times in the world economy.
Jobs reports around the world were also bleak, with unemployment in the 17 countries who currently use the euro as currency stayed at 11 percent, a record-high that they first saw in April. According to Daily Finance, unemployment in Spain spiked to almost 25 percent. Stock market shares in Facebook also saw steep decline, starting out at $38 per share and ending at $27.65.