Markets took a battering across the globe on Monday as the worst US employment report in 11 months sparked fears that the U.S. economy is heading back into a recession.
Global market problems were exacerbated when the official US employment report showed the worst employment numbers in 11 months and ongoing debt issues in Europe sparked further financial turmoil. Analysts had expected the U.S. jobs sector to add 93,000 jobs.
Britain’s FTSE dropped 100 points (1.6 percent) to 5,206.56, while Germany’s DAX was down to 5,391.24 a 2.7 percent drop. France also witnessed a steep drop in their own financial system which fell 2.4 percent to 4,074.47.
Other declines were witnessed in Asian markets including the Japan Nikkei which fell 1.9 percent and South Korea’s Kospi market which fell 4.4 percent.
The U.S. Federal Reserve is expected to take action during their September meeting to support the economy, possibly by releasing a third round of bond purchases known as quantitative easing III or QE3.
In the meantime there was some good news for U.S. customers today as oil fell to $86 per barrel, a move that occurred as analysts believe a weakened U.S. economy will lead to less demand for crude.
On the U.S. side the Dow Jones industrial lost 253.31 points to close at 11,240.26, the largest decline in two weeks, while the Standard Poor’s 500 index fell by 2.5 percent to 1,173.97 with the Nasdaq also taking a tumble to 2,480.33, a 2.6 percent decline.