The stock market plunged on Thursday as fresh Greece concerns and disappointing U.S. economic data weighed on investors.

The S&P 500 Index dropped 16.95 points, or 1.53 percent, to trade at 1,088.29 at 10:09 am.  The Dow Jones Industrial Average dropped 173.74 points, or 1.67 percent, to trade at 10,200.42.

The American Depository Receipts (ADRs) of National Bank of Greece (NYSE:NBG) lost 5.03 percent. JPMorgan (NYSE:JPM), one of the top gainers of the Dow on Thursday, lost 2.72 percent.

Commodities were hard hit, with oil futures falling 2.44 percent and copper futures falling 1.87 percent.  Suncor Energy (NYSE:SU) fell 3.50 percent and the ADRs of Rio Tinto (NYSE:RTP), the mining giant, fell 3.44 percent.

Greece Woes

Greek citizens staged their massive 24-hour strike against the austerity measures on Wednesday.  There were reports of civil unrest as protestors rioted and clashed with police forces.

The S&P rating agency also stated that for Greece's sovereign debt, a further downgrade of one to two notches is possible within a month.

Downside risks for Greece's real and nominal growth are likely to increase the size of needed fiscal consolidation, raising questions about the feasibility of the country's ambitious budgetary goals, said the agency.

S&P is also concerned about the growing backlash from Greek citizens.

To further complicate problems, European officials have threatened to press Greece for additional austerity measures if Greece fails to meet the targets of its deficit cutting plan. 

Funding Needs

According to the Wall Street Journal, Greece plans to issue its 10-year government debt next week.  The publication cited a person familiar with the situation who said that Greece originally planned the sale for this week but postponed it in light of the strikes and the threat of an S&P downgrade.

For the remainder of 2010, the Greek government still needs to raise a substantial amount of money to sustain its operations.  Greece will also be tested in the near future as 22 billion euro worth of Greek sovereign debt will mature in the next two months.

The spread of the yield between Greece and German bonds widened on Thursday and the cost of insuring Greek debt against default also rose. 

Troubling U.S. Data

At 8:30 am EST, the U.S. reported unemployment claims of 496,000, which is a 22,000 increase from last week.  Economists surveyed by Bloomberg actually expected the figure to decline to 460,000. 

While some cite backlog in processing applications as a factor, data about the U.S. job market continue to be troubling.

Fed Chairman Bernanke, in his testimony on Wednesday, stated that the job market remains quite weak, with the unemployment rate near 10 percent and job openings scarce.

Core durable goods orders, which excludes transportation items, fell unexpectedly to 0.6 percent.  The drop is the largest since August of last year.

Looking Ahead

President Obama will be eyed as he tries to gather bipartisan support for his newly proposed health care reform bill.  He is schedule to participate in a televised healthcare summit at 10:00 am EST.

Market participants will also digest Bernanke's second day of testimony before the House Financial Services Committee.

Lastly, the U.S. Gross Domestic Product (GDP) report, scheduled to be released on Friday at 8:30 am, will be eyed by investors.

Follow us on twitter @IBTFinance