Stocks slumped Friday after a government report showed employers added fewer jobs than expected last month and the euro plunged to a new 4-year low, reviving worries about the health of the European economy.

The Dow Jones industrial average (INDU) lost 200 points, or 1.9%. The S&P 500 index (SPX) gave up 21 points, or 2%. The Nasdaq composite (COMP) slid 44 points, or 1.9%.

On Thursday, stocks inched higher, as gains in the technology sector were offset by slumping financial and energy stocks.

Economy: Employers added 431,000 jobs in May, 411,000 of which were temporary Census positions, the Labor Department said. Economists were expecting the government to report an increase of 500,000 jobs, according to a survey by Briefing.com.

Meanwhile, the unemployment rate dipped to 9.7% from 9.9% last month.

The monthly employment numbers are driving the way investors look at the U.S. economic recovery, said Mark Luschini, chief investment strategist with Janney Montgomery Scott.

Euro: The euro tumbled to a new four-year low against the dollar, falling as low as $1.2019 before recovering a bit to stand at $1.2055.

The dollar fell 0.6% against the yen.

World markets: Markets in Europe tumbled. Britain’s FTSE 100 lost 1.4%, Germany’s DAX gave up 1.5% and France’s CAC 40 retreated 2.3%.

Asian markets were mixed. Japan’s Nikkei lost 0.1% and Hong Kong’s Hang Seng was little changed. China’s Shanghai Composite added a few points.

Commodities: U.S. light crude oil for July delivery fell $1.61 to $73 a barrel on the New York Mercantile Exchange.

COMEX gold for August delivery dropped $6.40 to $1,203.60 an ounce.

Bonds: Treasury prices rallied, lowering the yield on the 10-year note to 3.25% from 3.38% late Thursday. Treasury prices and yields move in opposite directions.

By CNNMoney

Tags: Dow Jones Industrial, economy recovery, european economy, european markets, financial, financial stocks, Nasdaq composite, stock market, unemployment rate, united technologies, us economy, us stocks

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