Major stock indexes slump 1% on sluggish job growth data NEW YORK - Sluggish job growth has reinforced investor fears about the struggling U.S. economy, prompting louder calls that the Federal Reserve and Congress renew efforts to boost growth. Major stock indexes slumped 1% on Friday after the Labor Department reported its third-straight month of weak hiring. Only 80,000 jobs were created in June, a big drop from the average of 226,000 logged each month during the first quarter. The continued drumbeat of soft economic reports could increase the chances that the Fed will do something to help stimulate the economy. Policymakers said during the last policy-setting meeting in June that they stood ready to act if needed. But analysts say it's hard to tell if the latest economic snapshot will be enough to drive more stimulus. The Fed will now probably focus on the stream of corporate earnings reports that start coming out next week and look for signs about future hiring. "We're going to have to start employing people again or the economy is going to slow significantly," said J.J. Kinahan, chief derivatives strategist for TD Ameritrade. Friday's job report, along with recent lackluster manufacturing and services-sector data, led S&P Capital IQ to conclude that the U.S. faces a higher chance of falling back into recession. The firm said there is now a 50% chance, up from 20% previously. The report also dashed hopes after payroll data firm ADP indicated Thursday that the economy gained 176,000 jobs, raising investors' expectations. "It's really hard to sugarcoat these numbers," said Michael Thompson, head of Global Markets Intelligence at S&P Capital IQ in New York. The economy looks like it's relapsing into a more precarious position. The Dow Jones industrial average - which at one point Friday was down 193 points - shed 124.2 points, or 1%, to 12,772.47. The broader Standard & Poor's 500 index lost 12.9 points, or 0.9%, to 1,354.68; and the Nasdaq composite index lost 38.79 points, or 1.3%, to 2,937.33. The sell-off could have in part been magnified by lower volume typical of summer holiday weeks, analysts said. The stock market was closed on the Fourth of July. Equities markets finished the week lower, although until Friday they were higher on optimism that European leaders were able to shore up the continent's troubled banks. In all, investors pulled out about $25 billion from the stock market this week. The anemic jobs report led investors to shift money into low-risk assets. The price of the 10-year Treasury note rose, sending its yield down to 1.55% from 1.60% late Thursday. The dollar rose against the euro. Another worry hampering stocks is fear about a looming fiscal crisis at the end of the year that could hurt job growth and stall the nation's economic recovery. Analysts say investors are skittish because of the so-called fiscal cliff, which is the phrase used to describe the expiration of Bush tax cuts Dec. 31 and the imposition of automatic spending reductions Jan. 1. It could cost the economy some $720 billion if the changes take effect, according to some calculations. Quincy Krosby, a market strategist for Prudential Financial Inc., said avoiding this fiscal cliff would bring confidence back into the stock market. "It would help for consumer confidence," she said. It would help for investor confidence to have that be dealt with sooner rather than later. In the meantime, Krosby said, investors are expected to pay attention to how companies are doing. Reports by U.S. companies for the last three months, and their forecasts for the rest of the year, could shed light on global demand. Earnings announcements will begin Monday with aluminum giant Alcoa Inc. JPMorgan Chase & Co., the country's largest bank by assets, will release its results Friday.