NEW YORK — Investors grew nervous about the shape of the economy Thursday, dumping stocks at the last minute ahead of a key government report on unemployment.
After a sleepy day of small back-and-forth trades, stocks began sliding in the last half-hour. The drop intensified in the final 20 minutes, and with less than two minutes until the closing bell the Dow Jones industrial average was down nearly 103 points.
The index ended off its lows but still posted a loss of 87 points. The wave of selling swept through the market and revealed how skittish investors remain.
While traders offered various reasons behind the slide, each one suggested that investors remain on edge with worries about the pace of the economy’s recovery. Now in the final month of the year, investors are eager to preserve the gains they’ve made in 2009.
When a torrent of selling hits, many investors would rather just step out of the market.
“When you get a sell-off like that at the end of the day, it tells me that there’s no conviction in those buyers who are around,” said Joe Saluzzi, co-head of equity trading at Themis Trading. “The nervous Nellies are out there, and everyone had itchy trigger fingers.”
The unease came ahead of the Labor Department’s November unemployment report, which is due before the start of trading today.
Worries about the economy dogged investors throughout the day after a weak snapshot of the service industry.
The Institute for Supply Management said during morning trading that its index of activity in the service industry fell to 48.7 in November from 50.6 in October. That was below what analysts had been expecting and signaled contraction.
The Dow slid 86.53, or 0.8 percent, to 10,366.15, but is still down only 1 percent from a 14-month closing high Tuesday. It had been up as much as 55 points early in the day and crossed the flat line 89 times before day’s end.
The broader Standard & Poor’s 500 index fell 9.32, or 0.8 percent, to 1,099.92, while the Nasdaq fell 11.89, or 0.5 percent, to 2,173.14.
There is broad agreement that a recovery in jobs is crucial for the economy to continue growing.
Economists expect that employers cut 130,000 jobs last month and that the unemployment rate remained flat at 10.2 percent.
Dan Cook, senior market analyst at IG Markets in Chicago, said he expects investors to hew toward safer investments as the end of the year approaches.
