Stocks resumed their downward march on Thursday after a one-day reprieve with all three major indexes down more than 1 percent as a labor market report added to recent evidence the economy has lost momentum.
Six stocks fell for every gainer on the New York Stock Exchange, and all 10 S&P sectors were lower.
New claims for unemployment benefits edged down last week, pointing to a marginal improvement in the jobs market, the Labor Department said. For details, see
Essentially, claims have stalled and the growth of employment has stalled, which is very consistent with what we know to be the case for the economy, said Hugh Johnson, chief investment officer of Hugh Johnson Advisors LLC in Albany, New York.
Everything, the claims numbers included, says the same thing -- the economy has stopped.
Further weighing on markets, European Central Bank (ECB) President Jean-Claude Trichet said, It is true that we are experiencing a high level of uncertainty, not just in the euro zone. The ECB signaled it was buying government bonds in response to a deepening European debt crisis.
The Dow Jones industrial average <.DJI> dropped 173.62 points, or 1.46 percent, to 11,722.82. The Standard & Poor's 500 Index <.SPX> lost 21.57 points, or 1.71 percent, to 1,238.77. The Nasdaq Composite Index <.IXIC> fell 47.38 points, or 1.76 percent, to 2,645.69.
The S&P 500 index rose Wednesday after seven straight losing sessions, but worries about the economy kept investors jittery and trading volatile, with Friday's key payroll report looming.
Retailers lost ground even as chain stores reported healthy July sales increases. Deep discounts and the warmest weather in decades lured shoppers to malls.
Still, teen retailer Aeropostale Inc
Kraft Foods Inc
(Reporting by Chuck Mikolajczak; editing by Jeffrey Benkoe)