U.S. and Europe stocks slide on jobs data

By Herbert Lash

NEW YORK (Reuters) - U.S. stocks fell sharply on Friday in response to a grim U.S. jobs report that sent bond prices higher in Europe and pushed the price of crude down to $42 a barrel as prospects for the world's economies darkened.

European shares extended losses in afternoon trade as investors reeled at U.S. government data showing a loss of 533,000 jobs in November, the weakest performance in 34 years.

Oils and bank stocks led the decline in Europe, while oil and defence stocks pushed the Dow down in the United States.

The dollar fell to a seven-week low against the yen but rose against the euro as investors once again sought shelter in the U.S. currency.

"When you see such a shocking employment number, you realise the devastating effect that can have on household demand," said Henk Potts, equity strategist at Barclays Stockbrokers in London.

Shortly after opening, the Dow Jones industrial average .DJI was down 67.30 points, or 0.80 percent, at 8,308.94. The Standard & Poor's 500 Index .SPX was down 6.59 points, or 0.78 percent, at 838.63. The Nasdaq Composite Index .IXIC was down 10.73 points, or 0.74 percent, at 1,434.83.

The pan-European FTSEurofirst 300 .FTEU3 index was down 3 percent at 797.26 points.

Euro zone government bond futures extended gains to a fresh session high, pushing the 10-year cash yield below 3 percent after the worse-than-expected U.S. jobs report.