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Stocks Plunge on Weak Jobs Report

Demand for safe-haven assets rose amid heightened risk aversion, pushing the yield on the 10-year Treasury note below 1.5% for the first time ever. Gold was soaring amid renewed expectations for additional quantitative easing in the wake of the disappointing data.

"It's hard to get much worse than 69,000. Probably in the summer I would see the numbers going up a little bit, but if we're going to hover around 100,000 jobs added , I definitely see a QE3 coming," said Frank Fantozzi CEO of Planned Financial Services.

Global markets had already been trading weaker amid fresh signs of a slowdown in China and further weakness in Europe.

China posted its slowest manufacturing growth in more than a year, with the purchasing managers index falling to 50.4 in May from 53.3 in April.

European shares dropped amid reports of a further slowdown in manufacturing and rising unemployment in the 17-nation eurozone.

The eurozone PMI declined to 45.1 in May from 45.9 in April, marking a three-year low. Unemployment in the region hovered at 11%, with 17.1 million people now without jobs.

The FTSE in U.K. shed 1.1%, while Germany's DAX sank 3.4%.

In Germany, the yield on two-year bonds turned negative for the first time, indicating that investors were essentially paying for capital protection.

Meanwhile, the U.S. Bureau of Economic Analysis also released numbers on personal income and spending.

Personal income increased $31.7 billion, or 0.2% in April, down from 0.4% in March.

Personal consumption expenditures rose 0.3%, up from 0.2% in March.

The Institute for Supply Management's index of manufacturing activity dipped to 53.5 in May from 54.8 in April, below expectations for a reading of 54.

The Commerce Department said construction spending data rose 0.3% in April, compared to a forecast for a 0.4% rise.

"It's hard to look around and see a lot of rays of sunshine. I think it's important to recognize, though, that every time in this recovery when things have looked gloomy, the economy has turned out to be resilient - not strong, but it keeps going," said Josh Feinman, global chief economist at Deutsche Bank Advisors.

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