Stocks drop below 12,000, continue losing streak

A week ago, the Labor Department reported that the economy added just 54,000 jobs in the month of May, coming up well short of economists’ expectations. That report served to cap off several rounds of underwhelming economic indicators, including new data on the rate of economic growth and the number of workers applying for initial unemployment benefits.

The Dow fell 172.45 points, or 1.4 percent, to close at 11,951.91. The S&P 500 index fell 18.02, or 1.4 percent, to 1,270.98. The Nasdaq dropped 41, or 1.5 percent, to 2,643.733.

Federal Reserve Chairman Ben Bernanke gave a speech on Tuesday in which he said the economy’s greatest troubles — high oil prices and supply-chain disruptions from Japan — would eventually pass and reduce inflationary pressures. 

Bernanke conceded that the economic recovery was “frustratingly slow” but did not hint at a new round of quantitative easing, the name given to the Fed’s efforts to lower lending rates and spur business. The second round of the program is scheduled to end this month.

Meanwhile, Bernanke described the labor market as “far from normal” and “quite weak,” but also said the jobs market had “seen signs of gradual improvement.” He noted that the private sector has added on average 180,000 jobs a month over the last five months — compared to fewer than 140,000 in the last four months of 2010.