U.S. stocks hammered by Microsoft report, economy worries

U.S. stocks fell Thursday after being up and down yesterday on quarterly reports from Microsoft and jobless and housing data in the U.S. which signaled the recession is deepening.

Today, on news that Microsoft is slashing 5, 000 jobs, the Dow Jones dropped 155 points or 1.9 percent at 8072.63 led by falls on 29 of its 30 components.

Microsoft fell 8.3 percent, Ebay dropped 13 percent after reporting its earnings declined as much as 31 percent. Nokia shares also slipped 11 percent, Seagate Technology 12 percent, and Google 0.6 percent (ahead of its earnings report).

The Nasdaq Composite Index was down 3 percent at 1462.10. The S&P 500 fell 2.3 percent to 820.77.

Raising concerns about the economy, the U.S. Labor Department reported today that initial claims for jobless benefits increased to 589,000 the week ended Jan 17., 62,000 more than the previous week. New residential construction declined 15.5 percent in December, the lowest sin 1959.