Stocks fell in choppy trading on Thursday as the latest signs of labor market weakness and worries over the fate of major banks cut off a round of bargain-hunting and drove bank stocks to a 17-year low.
The Dow industrials fell to within striking distance of fresh bear market lows.
The U.S. economy, stuck deep in recession, was hit by reports that showed the number of workers continuing to claim jobless benefits jumped to a record high in the first week of February and factory activity in the Mid-Atlantic region contracted sharply.
The market is focusing right now in the financials and the stimulus and bailout packages, said Rob Stein, managing partner at Astor Asset Management in Chicago.
The market understands the position the banks are in. They might actually be insolvent but there is some value to their importance to the economy and what the Fed does from a bailout standpoint. Their price is reflecting that.
Bank of America
The Dow Jones industrial average <.DJI> fell 47.07 points, or 0.62 percent, to 7,508.56. The Standard & Poor's 500 Index <.SPX> shed 3.71 points, or 0.47 percent, to 784.71. The Nasdaq Composite Index <.IXIC> declined 13.34 points, or 0.91 percent, to 1,454.63.
Earlier, bargain-hunting had helped support the market and the S&P 500 and Nasdaq had risen more than 1 percent.
A disappointing outlook from Hewlett-Packard Co
On Nasdaq, iPod maker Apple
On the upside, energy shares rose after data showed crude stockpiles fell unexpectedly last week and U.S. crude futures jumped 7 percent. Chevron
Another bright spot was Sprint Nextel
(Editing by Leslie Adler)