Wall Street tumbles as jobs, Fed data curb optimism

Stocks slid on Thursday as signs of further jobs weakness and a disappointing Fed regional survey fueled doubts about prospects for a quick economic recovery.

A reduced credit rating outlook for Britain also heightened investor concern that similar actions may loom elsewhere.

Shares of big manufacturers dropped, with United Technologies Corp falling 3.2 percent to $50.11, while plane maker Boeing Co shed 4 percent to $42.80.

The Dow Jones industrial average <.DJI> dropped 149.82 points, or 1.78 percent, to 8,272.22. The Standard & Poor's 500 Index <.SPX> slid 17.00 points, or 1.88 percent, to 886.47. The Nasdaq Composite Index <.IXIC> fell 37.69 points, or 2.18 percent, to 1,690.15.

(The data) is not really giving the market the kind of exclamation point it needs to turn on a dime, or to justify the move we've seen in the Dow over the last two-and-a-half months, said Peter Kenny, managing director at Knight Equity Markets in Jersey City, New Jersey.

What it really is telling us is that we're in for a very slow and deliberate turn before we can really start building a solid foundation for the next move up in the market.

Investors also pummeled technology shares. Apple Inc was the Nasdaq's top drag, down 1.5 percent at $124.07. Tech company fortunes are closely linked to a growing economy.

U.S. government data showed ongoing claims rose to a new record as the recession battered employment, but the number of workers filing new claims for jobless aid fell by 12,000 last week.

The Philadelphia Fed's survey of manufacturing conditions for the U.S. mid-Atlantic contracted in May for the eighth straight month, but the deterioration improved slightly from April.

The economic data came one day after the U.S. Federal Reserve offered a more pessimistic view for economic recovery, denting optimism that had underpinned the stock market's recent rally from 12-year lows of early March.

(Reporting by Chuck Mikolajczak; editing by Jeffrey Benkoe)