Stocks shed value in worst day of 2012

By Peter Schroeder - 04/10/12 04:54 PM ET

Investors worried about the strength of the global economy drove stocks down Tuesday in their sharpest one-day fall so far this year.

All three major stock indexes — the Dow Jones Industrial Average, NASDAQ and S&P 500 — ended the day down, with the Dow dropping more than 200 points. All told, stocks were down more than 1.5 percent, marking five straight days of losses for the market.

Continued concern about the European debt crisis, as well as growing skepticism about whether the Federal Reserve is considering another major effort to boost the economy from its current initiatives, has contributed to the downturn.

Not helping matters was Friday's jobs report, which came up well short of expectations. The Labor Department reported that in March the economy added 120,000 jobs, while most were expecting more than 200,000 had been created.

The miss marked an end to a run of promising jobs data, as jobs reports for the last three months prior to Friday's findings beat expectations and showed job gains of more than 200,000 each. Further driving concern from Friday's report was the fact that the unemployment rate dropped to 8.2 percent from 8.3, but mainly thanks to frustrated job-seekers dropping out of the hunt altogether.

With the jobs market appearing to lose steam, eyes have turned back to the Fed and its chairman, Ben Bernanke, for any indications that the Fed might pursue a third round of "quantitative easing." The market-friendly move, when the central bank buys up billions of bonds to ease borrowing costs, has made Bernanke a bit of a political punching bag, earning critiques from Republicans both in Congress and on the campaign trail.

Bernanke acknowledged in remarks Monday evening that the economy is "still far from having fully recovered," but gave no indication that the Fed would be embarking on new efforts to spur economic growth.

Prior to Friday's report, the Fed released the minutes of its March meeting of its policy-setting committee. The minutes revealed that several Fed members were concerned that the U.S. economy could not keep up the speedy pace of recent jobs gains, arguing that they were outpacing relatively tepid economic growth.

However, the minutes offered little indication that officials were seriously debating a third round of easing, or further novel attempts to stimulate the economy. In its current efforts to boost the recovery, the Fed has kept interest rates near zero, and has said it expects to keep them there until the end of 2014.