Street turns cautious ahead of employment report

NEW YORK -- A period of relative calm on Wall Street ended in the last hour of trading Thursday as stocks tumbled amid growing investor anxiety about the government's key November employment report.

The major indexes each fell more than 3 percent, including the Dow Jones industrial average, which dropped more than 300 points.

It was clear that investors were worrying that Friday's employment report would show a further deterioration in the job market. Employers have cut 1.2 million jobs this year through October, leaving the unemployment rate at a 14-year high of 6.5 percent.

Economists expect the Labor Department will report Friday that the rate increased to 6.8 percent in November and that companies cut another 320,000 jobs.

The late-session decline followed a decent run for stocks, which have closed higher in seven of the last eight sessions. It also came as the heads of the Detroit automakers appeared before Congress with hopes of persuading skeptical lawmakers to save their troubled industry. While the market expects the Detroit companies will be able to win some aid from Capitol Hill, support for the troubled companies wasn't assured.

General Motors Corp., Ford Motor Co. and Chrysler LLC are collectively seeking $34 billion in emergency aid.

Anthony Conroy, managing director and head trader for BNY ConvergEx Group, said investors are likely taking money off the table ahead of the employment report and that there was disappointment over the appearance of the heads of the U.S. automakers on Capitol Hill.

"There was no clarity coming out of the autos. People were expecting some clarity," he said.

In late afternoon trading, the Dow Jones industrial average fell 303.86, or 3.54 percent, to 8,287.83.

Broader stock indicators also declined. The Standard & Poor's 500 index fell 36.40, or 4.18 percent, to 834.34, and the Nasdaq composite index fell 65.40, or 4.38 percent, to 1,426.98.

The Russell 2000 index of smaller companies fell 20.43, or 4.50 percent, to 433.33.

GM fell 82 cents, or 16.7 percent, to $4.08, while Ford fell 22 cents, or 7.7 percent, to $2.63. Chrysler isn't publicly traded.en at least a year, fell 13.3 percent. Same-store sales are a key measure of a retailer's health. Macy's advanced 42 cents, or 5.6 percent, to $7.81.

Target Corp. said its same-store sales for the month fell 10.4 percent. The stock rose 4 cents to $34.52.

The sales declines at both companies were bigger than Wall Street had forecast.

Many shoppers looking for discounts turned to Wal-Mart Stores Inc. The world's largest retailer posted a better-than-expected 3.4 percent increase in sales. In the U.S., grocery sales helped results. Wal-Mart rose 54 cents to $54.92.

AT&T fell 62 cents, or 2.1 percent, $28.46 after reporting it is cutting 12,000 jobs, or about 4 percent of its work force, because of the economic downturn.

Chemicals maker DuPont said it will cut 2,500 jobs, mostly serving the U.S. and European automotive and construction markets, due to lower demand. DuPont rose 21 cents to $23.82.

Meanwhile, Merck & Co. said its profit will fall in 2009 due to restructuring costs, generic competition and slower sales of key products. Its forecast was below Wall Street estimates for next year. Merck fell $1.07, or 4.0 percent, to $25.39.

Light, sweet crude fell $2.88 to $43.92 a barrel on the New York Mercantile Exchange. Crude, which soared to a record $147.27 in July, is now trading at its lowest levels in four years, having plunged in response to the weakening global economy.

Overseas, Japan's Nikkei stock average fell 1.00 percent. In afternoon trading, Britain's FTSE 100 fell 0.15 percent, Germany's DAX index slipped 0.07 percent, and France's CAC-40 fell 0.17 percent.