Wall Street slides on weak economy and oil plunge

By @ibtimes on

The Dow and S&P 500 fell on Thursday after a weak labor market report fueled new fears about the strength of the economic recovery and as energy shares tumbled with the price of oil.

The energy sector of the S&P <.GSPE> was the worst performer, falling 3 percent as U.S. crude sank 9 percent to below $100 a barrel. Occidental Petroleum Corp fell 3.4 percent to $105.16.

But an index of air carriers <.XAL>, a sector sensitive to fluctuations in energy costs, advanced 3.5 percent, its largest daily gain in almost two months.

In the latest report to stir up worries about the strength of the recovery, data showed weekly jobless claims rose to an eight-month high.

The market had been pretty good at shrugging off the bad news, said Kate Schapiro, portfolio manager at Sentinel Asset Management in San Francisco. The reality is we're still in a difficult environment.

The Dow Jones industrial average <.DJI> dropped 105.31 points, or 0.83 percent, to 12,618.27. The Standard & Poor's 500 Index <.SPX> lost 8.51 points, or 0.63 percent, to 1,338.81. The Nasdaq Composite Index <.IXIC> dipped 2.74 points, or 0.10 percent, to 2,825.49.

Consumer-related shares were buoyed as the drop in crude was seen lessening the burden of high gasoline prices.

It seems to me if people feel relatively secure in their jobs and they have a little money, they are spending it, Schapiro said. The problem is the very low end of the economy, where people are getting really squeezed.

The S&P was on its way to a fourth day of losses and pierced through its 14-day average. The index bounced off an area that provided strong resistance on the way up and could become a support level.

The weak labor data added to investor caution ahead of Friday's key report on jobs, with unemployment still a weak spot for the U.S. economy.

Silver touched a five-week low and was set for its deepest weekly decline in nearly 30 years. The iShares Silver Trust exchange-traded fund tumbled 11 percent.

In a boost to the Nasdaq, Electronic Arts Inc hit its highest level since August 2009 before easing to $21.46, up 7.7 percent one day after a strong profit report.

JDS Uniphase Corp jumped 7.6 percent to $21.51 after forecasting strong demand for its laser and fiber optic products.

(Reporting by Rodrigo Campos; editing by Jeffrey Benkoe)

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