Stocks fall to their lowest level in four months

Stocks fell to their lowest level in four months Friday after the government said hiring remains weak and another European country warned its economy was in trouble.

The Dow Jones industrial average dropped 323 points, or 3.2 percent, to 9,931.97. That was its steepest drop since May 20, and all 30 stocks that make up the index fell.

The Standard & Poor's 500 index and the Nasdaq composite index also fell more than 3 percent. The S&P fell 37.95, or 3.4 percent, to 1,064.88. The Nasdaq dropped 83.86, or 3.6 percent, to 2,219.17.

The drop pushed the market back into "correction" mode, meaning a decline of at least 10 percent from a recent high.

The jobs report was the latest during the week to signal that the economy isn't as robust as hoped.

"It's almost as if the worst fears of the market were realized, at least in this one report," said Richard Sparks, senior equities analyst at Schaeffer's Investment Research.

Retailers were among the hardest-hit stocks after investors bet that a weak job market would discourage consumers from spending. Financial stocks also fell sharply on concerns that borrowers would continue having problems paying their bills.

Investors are also worrying about the potential impact of Europe's economic problems on the United States. The spokesman for Hungary's prime minister described the country's economy as being in a "grave" situation, but said his government is ready to avoid a crisis like the one being faced by Greece.

A drop in the euro - which fell to a four-year low - contributed to stocks' slide. Hungary doesn't use the euro but the drop was a sign of flagging confidence in Europe's economy.

- AP