NEW YORK - A period of relative calm on Wall Street ended Thursday as stocks tumbled in the final hour of trading on growing investor anxiety ahead of the government’s November employment report.
The major indexes each slid more than 2.5 percent, including the Dow Jones industrial average, which dropped 216 points after rising in seven of the last eight sessions.
Investors are worried that today’s employment report would show a further deterioration in the job market; employers have already cut 1.2 million jobs in the first 10 months of the year, leaving the unemployment rate at a 14-year high of 6.5 percent.
Economists expect the Labor Department will report that the jobless rate rose to 6.8 percent in November and that companies cut another 320,000 jobs.
“It’s all about jobs and right now the outlook is pretty downbeat,” said Alan Skrainka, chief market strategist with Edward Jones in St. Louis.
Jeff Kleintop, chief market strategist at LPL Financial Services, said many institutional investors are bracing for the report to show the economy shed 400,000 jobs last month.
He said a reading below that number could prompt relieved investors to snap up stocks but that anything worse could touch off further selling.
“The market has been very reactionary to the data points, particularly key economic indicators like the employment report,” he said.
Thursday’s decline came as the heads of the Detroit automakers appeared before Congress with hopes of persuading skeptical lawmakers to provide $34 billion in emergency funds. While the market expects General Motors Corp., Ford Motor Co. and Chrysler LLC will be able to win some aid, a deal isn’t assured.
The pullback followed a decent run on Wall Street. Broad indexes like the Standard & Poor’s 500 index have finished with gains in seven of the last nine sessions. Monday was the biggest exception, when the major indexes plunged more than 7 percent at the prospects of a punishing recession.
Thursday’s selling, especially the final hour slide, fits in with the pattern of volatility that analysts have warned investors to expect as the market tries to recover from the devastating losses of the past few months.
Still, it was encouraging that stocks ended off their lows of the session — the Dow had been down as much as 332 points.
The Dow industrials ended down 215.45, or 2.51 percent, at 8,376.24.
Broader stock indicators also declined. The Standard & Poor’s 500 index fell 25.52, or 2.93 percent, to 845.22, and the Nasdaq composite index fell 46.82, or 3.14 percent, to 1,445.56.
The Russell 2000 index of smaller companies fell 14.23, or 3.14 percent, to 439.53.