North American markets slump on disappointing jobs claims and manufacturing data

North American markets slumped on disappointing jobs claims and manufacturing data, renewing worries of a double-dip recession.

The S&P 500, Dow Jones, and Nasdaq indexes shed 1.4%, 1.22%, and 1.37%.

In Toronto, the S&P/TSX Composite edged down slightly, retreating by 0.42%, as economic worries overshadowed the runup in gold.

Economy

According to the US Labor Department released this morning, job benefit claims rose 12,000 to 500,000, higher than the 470,000 number expected by economists.

The slowing of the US housing sector is prompting construction firms to let go of more workers. State and local governments are also letting go workers to cut its budget deficit.

Germany was the latest country to report its economic numbers, posting a 2.2% growth for the second quarter. The rosy numbers led Bundesbank, Germany`s central bank, to increase its forecast for GDP growth to 3% from the 1.9% June forecast.

US Market Movers

McAfee Inc. (NYSE:MFE), the provider of network security technology, surged 57% after it was announced that the company entered into a definitive agreement to be acquired by Intel for cash in a deal valued at $7.68 billion, or $48 per share.

Intel (NASDAQ:INTC ) has declined 3.3% since the deal was announced to trade at $18.95.

Open Text Corporation (Nasdaq:OTEX) was another notable gainer, soaring 16% to trade at $43.35 after the financial services firm, Morgan Keegan, upgraded the stock to outperform.

Sears (NASDAQ:SHLD) was one of the biggest decliners, retreating 8.8% after a disappointing earnings release.

On the Dow Jones index, General Electric (NYSE:GE) had the largest percentage decrease, falling 3.7%.

Canadian Market Movers

Notable gainers on the Canadian markets include Aecon Group (TSX:ARE) and IESI-BFC (TSE:BIN), the waste-services firm. The respective stocks advanced 2.88% and 4.52%, respectively.

Gammon Gold(TSX:GAM) rose 7% on strength of gold prices.

Alimentation Couche-Tard (TSX:ATD), the convience store operator, experienced one of the sharpest declines on the S&P/TSX index, declining 3.8%.

Canfor (TSX:CFP) and Canadian National Railway (TSX:CNR) also finished in the red, retreating 2.77% and 1.37%.

Story by ProactiveInvestors

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