* Data fuels jitters about labor market
* Construction equipment maker Terex cuts profit forecast
* Fourth day of losses for Nasdaq and S&P 500
* Dow off 2.9 pct, S&P 500 off 2.9 pct, Nasdaq off 2.9 pct
(Updates to late afternoon, changes byline)
By Kristina Cooke
NEW YORK, Sept 4 (Reuters) - U.S. stocks sank on Thursday,
as more signs of weakness in the labor market and increasingly
sluggish growth overseas heightened concerns about the
corporate profit outlook.
The market hobbled out of the opening gate after weekly
government data showed an unexpected jump in the number of
filings for jobless benefits, while a report by ADP Employer
Services showed private employers cut 33,000 jobs in August.
The data fueled investor nervousness ahead of the
government's key August non-farm payrolls report, and losses
cascaded in afternoon trading. Only two of the Dow's 30
components escaped the sell-off.
Construction and mining equipment maker Terex Corp <TEX.N>
compounded the gloom when it cut its 2008 sales and profit
forecast, citing weak demand in Western Europe and North
America. Its shares tumbled 21 percent to $37.36.
Other top drags included economic bellwethers Caterpillar
Inc <CAT.N> and General Electric <GE.N>.
"It's definitely fear of an economic downturn that's
hurting us today," said Jack Ablin, chief investment officer at
Harris Private Bank in Chicago. "The economic data and the
downbeat forecasts from management don't lend a lot of
confidence to the economic revival outlook."
The Dow Jones industrial average <> fell 333.25
points, or 2.89 percent, to 11,199.63, while the Standard &
Poor's 500 Index <.SPX> dropped 36.72 points, or 2.88 percent,
to 1,238.26. The Nasdaq Composite Index <> was down 68.15
points, or 2.92 percent, at 2,265.58.
A lower close would mark the fourth day of losses for both
the Nasdaq and the S&P 500, and would be the worst four-day
performance for both indexes in nearly three months.
Adding to market jitters were comments from Bill Gross, the
manager of the world's biggest bond fund. In order to stop a
sell-off in an array of financial markets, the U.S. government
should give the Treasury the right to buy debt and other assets
to halt a financial tsunami, said Gross, the manager of Pacific
Investment Management Co.
Generally lackluster August retail sales were another
headwind for the market, as were concerns that sluggish growth
was emerging abroad. The president of the European Central
Bank, Jean-Claude Trichet, said euro zone data points to
weakening growth at midyear.
"The job market has been just a slow drip of bad news,"
said John Augustine, chief investment strategist at Fifth Third
Asset Management in Cincinnati. "That's better than an open
faucet, but it's still bad news for the economy. The stock
market is struggling because it's waiting for better labor
market news."
Economists expect the government's labor report on Friday
to show a decline of 75,000 jobs in August, which would be the
eighth consecutive month of job losses in the United States.
Shares of Caterpillar, the maker of bulldozers and
excavators and a major exporter, fell 6 percent to $63.67.
Boeing's <BA.N> stock slid 5.5 percent to $62.46 after the
plane maker's largest labor union said its members had rejected
the company's contract offer and voted to strike.
Shares of investment bank Lehman Brothers <LEH.N> fell 10.4
percent to $15.16. Lehman's LibertyView hedge funds lost money
in July, when tumbling financial markets left many hedge fund
managers nursing their biggest declines of the year, according
to a note to investors obtained by Reuters.
Shares of technology companies, considered vulnerable
because of their overseas exposure, tumbled. Networking
equipment maker Cisco Systems <CSCO.O> was a top drag on the
S&P 500, with a drop of 4.4 percent at $22.29 on Nasdaq.
BlackBerry devices maker Research In Motion <RIM.TO>
<RIMM.O> was the top Nasdaq drag, falling 5.4 percent to
$108.59. Shares of iPhone maker Apple <AAPL.O> dropped 3.1
percent to $161.76.
(Additional reporting by Ellis Mnyandu and Steven C. Johnson;
Editing by Leslie Adler)
