Stocks fall on weak economic data

Markets fell on Friday after another day of weak economic data. The MSCI All-Country World Index lost 1.5 percent.

In the euro area, Markit's composite index based on a survey of purchasing managers dropped sharply to 46.7 in April from 49.1 in March. The services index fell to 46.9 from 49.2 following the manufacturing index's decline to 45.9 from 47.7 reported earlier in the week.

Negativity in the euro area was offset somewhat by the report of a surprise 0.3 percent rise in retail sales in March.

In the US, nonfarm payrolls rose 115,000 in April, the smallest increase in six months. Employment gains for the prior two months were revised higher by a total of 53,000 jobs. The unemployment rate fell to a three-year low of 8.1 percent from 8.2 percent in March.

PIMCO's Bill Gross said in an interview with Bloomberg that the weak US employment is a structural problem stemming from technology advances and the lack of retraining.

David Kotok of Cumberland Advisors also thinks that there is a long-term downward trend in employment. However, he also says that that means low inflation pressure, higher profits, and a continuation of Federal Reserve policy focused on low short-term interest rates, a combination that is bullish for stocks.