The Dow Jones industrial average lost 179.85 points, or 1 percent, to 17,730.48, slipping back into negative territory for the year. The Standard & Poor’s 500 index lost 20.62 points, or 1 percent, to 2,078.58. The Nasdaq composite fell 51.82 points, or 1 percent, to 5,095.30.
Investors continue to deal with the fallout of October’s strong jobs report, which greatly rais expectations that the U.S. Federal Reserve is likely to raise short-term interest rates, which have been close to zero since the 2008 financial crisis.
The Labor Department said U.S. employers created 271,000 jobs last month, more than the even most bullish of forecasts. The unemployment rate also dropped to 5 percent, the lowest in seven years. The surprising sign of strength could encourage the Fed to finally start to return interest rates to normal levels.
The possibility of higher interest rates continued to push investors to reposition their portfolios. Even in a declining stock market, investors also sold government bonds. The yield on the 10-year Treasury note rose to 2.34 percent. That’s up from 2.33 percent Friday and significantly higher than the 2.23 percent level on Thursday. Yields on other Treasuries, including the two-year and three-year notes, also rose.
Securities that bet on which way the Fed will move interest rates show roughly a 70 percent chance the central bank will raise rates.
Global stocks were also reacting to news out of China, where customs data showed the country’s imports plunged 18.8 percent in October from a year earlier, damping hopes for a Chinese economic rebound this quarter. Exports shrank 6.9 percent in a sign of weak global demand.
Germany’s DAX index fell 1.6 percent, France’s CAC-40 index lost 1.5 percent and the U.K.’s FTSE 100 lost 1 percent. In Asia, stocks actually rose in a bet that Asian governments would be more proactive in helping their ailing economies than their European counterparts.
Among individual companies, travel site Priceline fell $138.75, or 9.6 percent, to $1,311.15 after its outlook for the fourth quarter, a typically strong period for travel companies, came up short of analysts’ expectations.
Drugmaker Mallinckrodt fell $11.88, or 17 percent, to $58.01 after the short-selling firm Citron Research warned that the company might have issues similar to Valeant Pharmaceuticals. Citron became well-known earlier this year when it published a report on Valeant, whose stock has fallen by two thirds since the summer.
Benchmark U.S. crude fell 42 cents, or 0.9 percent, to $43.87 a barrel on the New York Mercantile Exchange. Brent crude, used to price international oils, declined 23 cents to $47.19 a barrel in London.
In other energy trading, heating oil fell a penny to $1.477 a gallon, wholesale gasoline was mostly unchanged at $1.371 a gallon and natural gas fell seven cents to $2.30 per 1,000 cubic feet.
Precious and industrial metals prices closed mixed. Gold edged up 40 cents to $1,088.10 an ounce, silver dropped 28 cents, or 1.9 percent, to $14.41 an ounce and copper rose a penny, or 0.5 percent, to $2.23 a pound.