Europe Shares Slide 4 Pct On Dire U.S. Jobs Data

Wall Street indexes were 2 to 3 percent lower when the European market closed for the day.

European stocks skidded with Wall Street after dire U.S. unemployment data signalled deepening cracks in the world's largest economy, knocking banks and oils.

The pan-European FTSEurofirst 300 index closed down 4 percent at 793.94 points. A credit crisis has sliced about half the value off the European stock market so far this year as major economies around the globe grapple with recession.

U.S. employers axed payrolls by 533,000 in November for the weakest performance in 34 years, government data showed, as the economy battles its worst crisis since the 1930s.

Wall Street indexes were 2 to 3 percent lower when the European market closed for the day.

Among Europe's banks, BNP Paribas, Royal Bank of Scotland and Barclays fell between 6 and 7.5 percent.

The U.S. Labor Department said the unemployment rate rose to 6.7 percent last month in the highest reading since 1993, compared with 6.5 percent in October, after widespread losses across the country's major industry sectors.

"Markets received a jolt of pain as U.S. employment numbers came in," said David Evans, market analyst at BetOnMarkets.com.

"Today's figures were the worst for three decades and are yet another instance to add to the ever growing pile of 'once in a generation' type extremes that we've seen in 2008."

Energy stocks were the biggest fallers on the index as crude fell beneath $41 a barrel to its lowest level since December 2004.

BG Group, BP, Royal Dutch Shell, Tullow Oil and Total slumped between 6 percent and 8.9 percent.

UNDERMINED MINERS

Miners fell as copper tumbled on poor demand outlook and gold also dropped. Xstrata, BHP Billiton and Kazakhmys all fell between 6.9 and 8.7 percent.

Among gainers in Europe, BT rose 2.1 percent. Ofcom, Britain's communications regulator, has proposed increasing the wholesale prices that BT charges other telecoms providers to cover the impact of inflation and rising costs over the last three years.

Credit Suisse raised its rating to "neutral" from "outperform"

Some defensives gained, with GlaxoSmithKline up 1.9 percent and Shire rising 1.7 percent.

Across Europe, the FTSE 100 index fell 2.7 percent, Germany's DAX lost 4 percent and France's CAC 40 fell 5.5 percent.

On Thursday, the European Central Bank slashed interest rates by 75 basis points to 2.5 percent, while the Bank of England cut rates by 100 basis points to 2 percent.

"Against the backdrop of falling economic forecasts softening labour markets, reduced household demand, (and) the continuation of the deleveraging programme that's taking place, equity markets inevitably are going to remain under pressure and volatile over the course of the next few months," said Henk Potts, equity strategist at Barclays Stockbrokers in London.

"You can't really identify a catalyst for turning around the equity market at least until the middle of 2009, despite the fact that valuations look very cheap. The rule of thumb is to remain defensive," Potts said.