U.S. stocks slid, capping the worst May for the Dow Jones Industrial Average since 1940, while the euro slumped and Treasuries rose as a downgrade of Spain’s debt rating and escalating tensions on the Korean peninsula triggered a flight from riskier assets.

The Dow tumbled 122.36 points, or 1.2 percent, to 10,136.63 at 4 p.m. in New York and lost 7.9 percent this month.

The gain in Treasuries extended the drop in 10-year yields this month to 36 basis points, the biggest monthly loss since December 2008, as government data showed consumer spending in the U.S. unexpectedly stalled, fueling speculation the economic recovery will be slow.

Bloomberg

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Paychecks from private business shrank to their smallest share of personal income in U.S. history during the first quarter of this year, a USA TODAY analysis of government data finds.
At the same time, government-provided benefits — from Social Security, unemployment insurance, food stamps and other programs — rose to a record high during the first three months of 2010.

Those records reflect a long-term trend accelerated by the recession and the federal stimulus program to counteract the downturn. The result is a major shift in the source of personal income from private wages to government programs.

The trend is not sustainable, says University of Michigan economist Donald Grimes. Reason: The federal government depends on private wages to generate income taxes to pay for its ever-more-expensive programs.

I agree 100% with Mr. Grimes, but I feel by the time the folks/politicians in power realize this, it will be too late.

USA Today Report

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In another sign that the recovery in the U.S. economy might be taking hold, employers added significantly more jobs to payrolls in April, according to a government report released Friday.

There was a gain of 290,000 jobs in the month, up from a revised 230,000 jobs added in March. It was the largest number of jobs added to the labor force since March 2006.
The results were much better than expected. Economists surveyed by Briefing.com had forecast a gain of 187,000 jobs.

After nearly two years of job losses, the economy has now added jobs in five of the last six months. With upward revisions for both March and February, there has been a gain of 573,000 jobs since the start of the year.

CNN Money

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Stocks staged one of the most dramatic selloffs in market history Thursday as what may have been a trader error exacerbated losses in a market already jittery about the European debt crisis.

The Dow ended down 347.80, or 3.2 percent, at 10,520.32, after being down as much as 998.50 earlier, the Dow’s biggest intraday drop on record. Treasurys surged.

Under current, New York Stock Exchange rules, if the market falls ten percent or more between 2:30 and 3:00 pm ET, trading is halted for 30 minutes. At its worst point, the Dow was down between 8 and 9 percent today.

The S&P 500 shed 3.2 percent, while the Nasdaq lost 3.4 percent. The CBOE volatility index, widely considered the best gauge of fear in the market, was around 34 at the closing bell, after being above 40 earlier. The VIX ended last week around 22.

At the height of the panic, one trader, on the condition of anonymity, said he heard fixed-income desks in Europe shut down early because there was no liquidity — basically European banks are halting lending right now.

“This is similar to what took place pre-Lehman Brothers,” the trader said.

CNBC

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After receiving billions of taxpayer dollars to stay afloat and wrenching vehicle recalls, the major players in the US auto market Monday reported surging sales for April.

The so-called Detroit Three automakers — Ford, General Motors and Chrysler — all reported positive year-on-year sales figures, building an a gradual upward turn for the industry after a difficult 12 months.

Toyota USA, which has suffered through a massive global recall affecting some 10 million vehicles worldwide, also reported improved sales across its divisions.

The figures were another hopeful sign for US automakers struggling to find their feet after months of turmoil that saw both GM and Chrysler undergo government-financed bankruptcies.

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