It was the second-worst day of the year for stocks

Washington Post:

Stocks lose 3% following bad May jobs report, more European debt troubles

Stocks dove in a massive sell-off in the last hour of trading, hitting their lowest levels since February. Wall Street responded to a discouraging May jobs report and more European debt troubles, raising concerns about a double-dip recession.

The Dow closed down 3.2 percent at 9,931.37, breaking 10,000. The Dow lost more than 300 points on the day. The index is off 12.5 percent from its April high and all 30 Dow stocks were down today. The Dow closed down 2.3 percent for the week.

The broader S&P 500 closed down 3.2 percent. The S&P is down 12.6 percent from its April high. It closed down 2.4 percent for the week.

The tech-heavy Nasdaq closed down 3.4 percent. It's down 12.3 percent since its April high and is down 1.8 for the week.

All three major indices are now in negative territory for the year.

It was the second-worst day of the year for stocks. Today's losses on the S&P 500 and the Nasdaq were worse than the indices suffered during the "flash crash."

The sell-off is likely being exacerbated by margin calls stop-loss orders, meaning investors' instructions to brokers to sell their stock when it drops to a certain price or has a certain-percentage drop. This creates a snowball sell-off effect.

Hungary is the latest European country to confess to debt problems. The current administration blames the previous one for hiding debt problems and lying about the nation's financial standing. The same was true of the past two administrations in Greece. A Hungarian official called his nation's situation "grave" and said a default is not out of the question.

In addition to adding yet another Euro state to the Continent's debt contagion, some in America feel that looking at Europe is the same as looking in the mirror. They look at deficit problems in states like California and watch state and local governments around the country slash employees and expenses to try to balance their budget.

Meanwhile, even though the national unemployment rate in May dropped to 9.7 percent from 9.9 percent, almost all job growth last month came from the addition of more than 400,000 Census workers -- jobs that will go away later this year. Traders wonder if the private sector is ready to start creating jobs and understand that government-fueled job creation is not sustainable.

All this raises worries that the U.S. could teeter back into a double-dip recession, less than one year out of the worst recession since the Great Depression. Former Labor Secretary Robert Reich, speaking earlier today on CNBC, raised the possibility of a double-dip recession, which no doubt spooked traders.