TODAY'S PAPER
66° Good Evening
66° Good Evening
Business

Stocks nose-dive over renewed economic pessimism

Stocks buckled Thursday under the growing belief that the global economy is weaker than many investors expected and likely to stop companies from hiring. The Dow Jones industrials briefly traded below 10,000 for the first time in three months before settling down 268.37, or 2.6 percent, to 10,002.18.

A flood of bad news, including rising debt levels in European nations and an unexpected jump in the number of Americans filing for unemployment benefits, had investors pulling money out of assets like stocks and commodities that look increasingly risky.

Fears of more disappointing news Friday, when the government issues its January employment report, contributed to the slide.

Major indexes skidded as much as 3.1 percent to their lowest levels in several months. The Dow's decline was its biggest in seven months. The index has fallen 723 points, or 6.7 percent, since closing at a 15-month high of 10,725.43 on Jan. 19.

The Standard & Poor's 500 index fell 34.17, or 3.1 percent, to 1,063.11, its steepest drop since last April. The Nasdaq composite index slid 65.48, or 3 percent, to 2,125.43.

The day's news reminded investors that the global economic recovery remains tenuous. The euro hit a seven-month low against the dollar. It also raised questions about whether the market can resume its rebound from 12-year lows it hit last March.

"The market is becoming aware that the wall of cash that lifted it last year is coming to an end," said Jon Merriman, chief executive of Merriman Curhan Ford in San Francisco.

Investors also worry that a slowdown in foreign countries could spill over to the United States and make it harder for the economy to overcome its biggest problem: unemployment.

The Labor Department said Thursday that claims for unemployment benefits rose by 8,000 to 480,000 last week, the fourth increase in five weeks. The news disappointed investors who had hoped for a drop.

Comments

We're revamping our Comments section. Learn more and share your input.

More news