NEW YORK (news agencies) — A sell-off for stocks has made it all the way around the world. Wall Street is tumbling again on worries about whether the U.S. economy’s growth can hold up until the Federal Reserve cuts interest rates. The S&P 500 fell 1.5% early Friday. The Dow Jones Industrial Average lost 485 points, or 1.2%, and the Nasdaq composite fell 2.4%. A report showing hiring by U.S. employers slowed last month by much more than expected sent fear through markets. That followed a batch of weaker-than-expected reports on the economy a day earlier. Intel sank after reporting weaker-than-expected profits and suspending its dividend.
THIS IS A BREAKING NEWS UPDATE. news agencies’s earlier story follows below.
Wall Street pointed sharply lower early Friday morning after a worse-than-expected government employment report spooked investors who were already panicked over signs of weakness in the U.S. economy.
Futures for the S&P 500 were down 1.4% after the Labor Department reported that U.S. employers added a meager 114,000 jobs in July. Futures for the Dow Jones Industrial Average sank 1% and losses for the technology-heavy Nasdaq were even worse as it gave back 2.2%.
The declines followed Thursday’s retreat on Wall Street after weak manufacturing data raised worries the Federal Reserve may have waited too long to cut interest rates, raising risks of a recession. After the U.S. central bank held steady at a meeting this week, Fed Chair Jerome Powell said a cut could come in September.
“The short-lived satisfaction of Fed Chief Powell communicating decent odds of a September rate cut has turned sour as investors are now panicking that the central bank isn’t trimming soon enough,” José Torres, a senior economist at Interactive Brokers, said in a report.
An unemployment rate that ticked up to 4.3% in July — from 4.1% in June — added anxiety to the recent pessimism that had been weighing on markets and more specifically, technology stocks.
A 24% decline in Intel’s shares in aftermarket trading deepened the gloom. The chipmaker said it was cutting 15% of its massive workforce — about 15,000 jobs — to better compete with more successful rivals like Nvidia and AMD. Intel also suspended its dividend after badly missing Wall Street’s second-quarter profit targets.
Intel’s dreary report dragged other chipmakers down as well, with Nvidia falling 5% and Micron giving up 4.4% before the bell.
Amazon was also off to rough start early Friday after the online retail giant reported revenue that came up short of expectations. Amazon, which was down 9.7% before markets opened Friday, also disappointed investors with a lower-than-expected sales forecast for the current quarter.
Shares Apple were down 1.2% after it reported sales of its marquee product, the iPhone, remained on a downward slope, dipping 1% from last year.
Elsewhere, in midday European trading, Germany’s DAX shed 2%, while the CAC 40 slipped 1.1%. In London, the FTSE 100 fell 0.6%.
Japan’s market retreated to where it was trading in January before it surged to an all-time high last month of over 42,000. The Nikkei 225 lost 2,216.63 points Friday, or 5.8%, to 35,909.70, with banks’, technology-related and manufacturers’ shares hit by heavy selling.
Japanese shares were pummeled after the central bank raised its benchmark interest rate on Wednesday, to 0.25% from 0.1%. That pushed the value of the Japanese yen higher against the U.S. dollar, potentially hurting overseas earnings of major manufacturers and deflating a boom in tourism.
The dollar fell to 147.33 yen early Friday from 149.37 yen late Thursday. It had recently traded above 160 yen. The euro rose to $1.0892 from $1.0789.
Elsewhere in Asia on Friday, Hang Seng in Hong Kong dropped 2.1% to 16,945.51, while the Shanghai Composite index saw a more modest loss, of 0.9% to 2,905.34.
Chinese shares have extended losses this week as investors registered disappointment with the government’s latest efforts to spur growth through various piecemeal measures, instead of hoped-for infusions of broader stimulus.
The Kospi in Seoul dropped 3.7% to 2,676.19 and Taiwan’s Taiex sank 4.4%. Both markets tend to be hit hard by weakness in technology shares.
South Korea’s Samsung Electronics dropped 4.2% while another maker of computer chips and other components, SK Hynix, dropped 10.4%. Taiwan Semiconductor Manufacturing Co., the world’s largest chip maker, lost 5.9%.
Elsewhere in Asia, Australia’s S&P/ASX gave up 2.1% to 7,943.20 and the Sensex in India was down 1.1%. Bangkok’s SET fell 0.7%.
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