Job jitters jolt Wall Street
Stocks slump after a pair of reports paint a worse-than-expected employment picture.
NEW YORK (CNNMoney.com) -- Stocks tumbled Wednesday morning after a pair of weak readings on employment raised the alarm ahead of Friday's bigger national labor market report.
Massive job cuts at Alcoa and warnings from Intel and Time Warner led the corporate news.
The Dow Jones industrial average (INDU), the Standard & Poor's 500 (SPX) index and the Nasdaq composite (COMP) all declined at least 1.5% in the early going.
Asian markets ended mixed, with Tokyo's Nikkei index up 1.7% and Hong Kong's Hang Seng down more than 3%. European stocks were down in afternoon trading. The London FTSE lost 2%.
The decline in futures and international stock indexes follows a relatively strong day on Wall Street. On Tuesday, the Dow Jones industrial average edged up about 0.7%, while the Nasdaq rose 1.5% and the S&P 500 rose about 0.8%.
Alcoa (AA, Fortune 500), a Dow component, said late Tuesday it will cut 13,500 jobs, or 13% of its global workforce, in a cost-saving move that will result in a between $900 million and $950 million hit to earnings for the quarter just ended.
Alcoa shares fell more than 9% in the early going.
"It's all about Alcoa this morning," said David Rovelli, managing director at Canaccord Adams. "They warned pretty badly [and announced] massive jobs cuts, with layoffs across the world."
Rovelli also said the markets were constrained by the minutes of the last Federal Reserve policy meeting, released Tuesday afternoon. The minutes revealed that unemployment would continue to rise into 2010.
Robert Brusca, chief economist at Fact and Opinion Economics, said Wall Street was reacting Wednesday to "the idea that this global malaise is getting worse."
In particular, Brusca said U.S. investors are worried about the weakness in European markets, fed by the shutoff of Russian gas supplies via Ukraine and the weaker employment picture in Germany.
Job reports: The number of announced job cuts in December fell 8.4% from a month earlier but were nearly four times the number announced one year ago, according to outplacement firm of Challenger, Gray and Christmas.
The firm said the 166,348 announced job cuts for December were the most for that month since the company began tracking data in 1993. The December total was down from November, when the company announced a seven-year high of 181,671 job cuts. But it was nearly four times the total from December 2007, which was 44,416.
Also on Wednesday, payroll processor ADP reported that private sector jobs plunged by 693,000 in December, which was much worse than expected.
Warnings: Intel (INTC, Fortune 500), the No. 1 chip maker and a Dow component, said fourth-quarter revenue will be weaker than expected, and that it expects to take a $950 million charge due to an investment loss. Intel shares fell 6% in early trading.
Time Warner (TMX), parent company of CNNMoney.com, lowered its 2008 forecast and now expects to report a net loss in the range of $1.04 to $1.07 per diluted share.
Shares fell 5.5% at the open.
The company had previously forecast that its 2008 adjusted operating income would increase 5% from 2007's $12.9 billion. Now the company expects adjusted operating income to edge up just 1%. The company is scheduled to release its 2008 results on Feb. 4.
Oil and money: Oil prices declined despite unrest in the Middle East and Russia's cutoff of gas supplies through Ukraine. Oil fell 73 cents to $47.85 a barrel on the New York Mercantile Exchange.
The dollar was down versus major international currencies, including the euro, the yen and the British pound. 
