NEW YORK - Stocks tumbled on Thursday as the number of Americans claiming jobless benefits rose unexpectedly and renewed fears of sovereign debt problems in Europe led investors to dump riskier assets.
The safe-haven greenback rose against a basket of currencies <.DXY> as the euro slid to a seven-month low against the dollar on worries about sovereign debt troubles in Greece, Portugal and Spain. Sectors sensitive to commodity prices such as oil and gold, which are denominated in dollars, and overseas revenues were among the worst hit.
Dan Cook, senior market analyst at IG Markets in Chicago said fears of sovereign debt defaults would take a toll on any type of risk trade today.
We're seeing it reflected in currencies, in equities pretty much around the world, he said. It's going to be more safe-haven plays.
Economic data also weighed on investors. Weekly initial claims for state unemployment benefits rose unexpectedly, pointing to stubborn weakness in the U.S. labor market.
The specter of rising unemployment ahead of Friday's nonfarm payrolls report overshadowed better-than-expected factory orders as investors piled into safer assets. U.S. Treasury debt prices rallied.
The Dow Jones industrial average <.DJI> fell 183.88 points, or 1.79 percent, to 10,086.67. The Standard & Poor's 500 Index <.SPX> lost 21.75 points, or 1.98 percent, at 1,075.53. The Nasdaq Composite Index <.IXIC> shed 42.95 points, or 1.96 percent, at 2,147.96.
Among materials shares, U.S. Steel Corp
Corporate earnings were mixed. Cisco Systems Inc
higher-than-expected revenue growth late on Wednesday as more customers resumed upgrading their networks to handle increasing wireless and Internet traffic.
Also late Wednesday, silicon maker MEMC Electronic Materials Inc
Weighing on financial shares, MasterCard Inc
(Reporting by Edward Krudy; Editing by Jan Paschal)