WORLD markets slumped yesterday as traders in Asia and the US returned from the long weekend to deal with the fallout from last week's poor jobs data from North America.
By late afternoon trading in New York, the benchmark Dow Jones Industrial Average had fallen 1pc to 12,931.30 while the Standard & Poor's 500 Index of the biggest American firms had slid 1.21pc to 1,381.11.
It was a grim return to business for American-based dealers after the holidays as they were confronted with a sea of red ink from the Asian session overnight.
Traders in the east had sold heavily, as markets had the first chance to digest last Friday's jobs report, which showed American employers added 85,000 less jobs in March than economists projected, the biggest shortfall since July.
The labour department's statement spurred concern about the pace of American growth after improving economic data helped fuel a 12pc first quarter rally in the S&P 500, the best annual start since 1998.
"The economy does continue to grow, but slowly," said John Carey at Pioneer Investments in Boston. "That's been the source of frustration for a lot of investors, that we haven't had the big forward movement in the economy like we have in the past."
All western European stock markets were shut yesterday, along with Australia, New Zealand, Hong Kong, Thailand and South Africa.
Oil fell on worries that a slowdown in the world's biggest economy will dampen demand, with Brent Crude falling nearly 2pc to $122 a barrel, while safe havens benefited. Gold added more than half-a-percent to $1,646 an ounce, and the yield on US Treasuries slid.
The jobs data is "a real shock", said Donald Selkin, at National Securities in New York. "Everybody is so hung up on the data."
Financial stocks dropped 2.1pc, the largest decline in the S&P 500. Bank of America lost 3.6pc, the biggest retreat in the Dow. JPMorgan erased 2.1pc. The KBW Bank Index dropped 2.6pc, with all 24 of its components falling at least 1.5pc.
Heavy industry firms were also hit in what was a broad-based sell-off in New York. Caterpillar retreated 2.6pc and General Electric fell 2.1pc, as industrial stocks fell 1.8pc.