Stocks slammed on jobs report

Stocks tumbled Friday morning after the government reported the economy lost 533,000 jobs in November - the biggest monthly decline in 34 years.

The Dow Jones industrial average (INDU) lost 200 points or 2.3% over an hour into the session. The Standard & Poor's 500 (SPX) index lost 2.5% and the Nasdaq composite (COMP) lost 2.6%.

Stocks tumbled Thursday after AT&T (T, Fortune 500) and other corporations announced over 20,000 job cuts, adding to worries ahead of the jobs report.

Jobs: Employers cut 533,000 jobs from their payrolls in November, the biggest monthly decline since 1974, and far above the 325,000 cuts that Wall Street economists were expecting.

September and October's job losses were revised up, bringing the 3-month decline to 1.3 million, the largest 3-month job loss total since World War II. So far this year, 1.9 million jobs have been lost, topping the 1.6 million lost in the 2001 recession.

Although the United States has been in a recession since December 2007, the credit crisis has intensified this fall, causing a series of bank failures and government bailouts as the financial markets were thrown into turmoil.

The unemployment rate, generated by a separate survey, rose to 6.7% in November from 6.5% in the previous month. It was short of the 6.8% economists were expecting, but still brought the unemployment rate up to the highest level in 15 years. (Full story)

The report is maybe one of the worst the Bureau of Labor Statistics has ever produced in its 124-year history, BLS Commissioner Keith Hall told lawmakers Friday at a Joint Economic Committee.

Company news: Executives from Detroit's Big Three automakers are back on Capitol Hill Friday, asking a House panel for a massive loan package to rescue their struggling businesses.

Executives from GM (GM, Fortune 500), Ford Motor (F, Fortune 500) and Chrysler testified before the Senate Thursday. The Big Three are seeking $34 billion in aid to rescue their struggling industry, up from an initial request of $25 billion last month.

Separately, GM on Friday said it will lay off about 2,000 workers in the first quarter of next year.

Bonds: Treasury prices fell, raising the yield on the benchmark 10-year note to 2.61% from 2.56% late Thursday. The 10-year yield dipped below 3% last week for the first time since the note was first issued in 1962. Treasury prices and yields move in opposite directions.

The yield on the 3-month Treasury bill slipped to 0.01% from 0.015% Thursday, near the 68-year low of zero hit last month. The short-term bill is seen as the safest place to put cash in the short term. The low yield means investors would rather preserve cash despite little or no interest than risk the stock market.

Lending rates showed little improvement. The 3-month Libor rate held steady at 2.19% unchanged from Thursday, according to Bloomberg. Overnight Libor fell to 0.28% from 0.52% Thursday. Libor is a key bank lending rate.

Other markets: In global trading, European markets tumbled, one day after the European Central Bank, the Bank of England and Sweden's Riksbank all lowered interest rates. Asian markets mostly ended lower although Hong Kong's Hang Seng managed to rise, gaining 2.5%.

The dollar gained versus the euro and fell against the yen.

U.S. light crude oil for January delivery fell 89 cents to $42.78 a barrel on the New York Mercantile Exchange, after ending the previous session at a nearly 4-year low.

COMEX gold for February delivery lost $14.50 to $751 an ounce.

Gasoline continued its fall to nearly four-year lows, with prices down 1.6 cents to a national average of $1.773 a gallon, according to a survey of credit-card swipes released Friday by motorist group AAA. Prices have been sliding for 2-1/2 months and have dropped more than $2 a gallon, or 54%.