August 30, 2010 10:17 AM
- Text
Stock Market Closes Below 10,000
(AP)
Stocks fell Thursday after early gains from a better report on jobless claims faded. The Dow Jones industrial average closed below 10,000 for the first time since early July.
The Dow lost 74 points, having been up as much as 45 earlier. The market has been trading in a back-and-forth pattern in recent weeks as many investors remain unconvinced that the economic recovery will hold.
Stocks have been on a generally declining trend in August after charging ahead in July. A bevy of poor indicators on the economy, especially home sales, pierced an optimistic mood brought on by strong earnings reports the month before. The Dow has lost ground in five of the past six trading sessions, and has shed 430 points over that time.
Poll: Americans Growing More Pessimistic about the Economy
Nearly 10 Percent of Homeowners Risk Foreclosure
The market enjoyed a brief reprieve from its malaise early Thursday from an encouraging sign on the job market. The Labor Department reported that first-time claims for jobless benefits fell last week after three straight weekly increases.
Now, it's up to Ben Bernanke to provide the next clues on the economy. The Federal Reserve chairman is delivering a speech early Friday that investors hope will shed light on how weak the U.S. economy really is and whether the Fed may take more steps to revive it.
Peter Cardillo, chief market economist at Avalon Partners Inc., said the market wants to see whether "the pulse of the Fed is beating at a fast rate with anxiety over the economy."
The Dow fell 74.25, or 0.7 percent, to 9,985.81. The Dow had traded below 10,000 several times this week, but hadn't closed below that level since July 6.
Broader market barometers also fell. The Standard & Poor's 500 fell 8.11, or 0.8 percent, to 1,047.22, while the Nasdaq fell 22.85, or 1.1 percent, to 2,118.69.
Falling stocks outpaced rising ones two-to-one on the New York Stock Exchange, where volume came to 1 billion shares.
First-time claims for unemployment benefits dropped to 473,000 last week, a bigger drop than analysts expected. First-time claims had jumped ominously the week before, going above 500,000 for the first time since November.
The latest jobless claims report suggests that hiring remains weak. In a healthy economy, weekly claims usually fall below 400,000. At the height of the recession in March 2009, weekly claims peaked at 651,000.
Investors are still worried about a persistently high unemployment rate of 9.5 percent and a general reluctance of employers to hire workers.
Bond prices traded in a tight range, further indication investors are nervous about the economy. Investors tend to buy up Treasurys, driving interest rates lower, when they are worried about economic growth.
The yield on the 10-year Treasury note dipped to 2.48 percent from 2.54 percent late Wednesday. Its yield helps set interest rates on mortgages and other consumer loans.
Long-term bond yields are hovering around levels not recorded since early 2009, when the country was in the depths of the recession and stocks hit 12-year lows.
The Dow lost 74 points, having been up as much as 45 earlier. The market has been trading in a back-and-forth pattern in recent weeks as many investors remain unconvinced that the economic recovery will hold.
Stocks have been on a generally declining trend in August after charging ahead in July. A bevy of poor indicators on the economy, especially home sales, pierced an optimistic mood brought on by strong earnings reports the month before. The Dow has lost ground in five of the past six trading sessions, and has shed 430 points over that time.
Poll: Americans Growing More Pessimistic about the Economy
Nearly 10 Percent of Homeowners Risk Foreclosure
The market enjoyed a brief reprieve from its malaise early Thursday from an encouraging sign on the job market. The Labor Department reported that first-time claims for jobless benefits fell last week after three straight weekly increases.
Now, it's up to Ben Bernanke to provide the next clues on the economy. The Federal Reserve chairman is delivering a speech early Friday that investors hope will shed light on how weak the U.S. economy really is and whether the Fed may take more steps to revive it.
Peter Cardillo, chief market economist at Avalon Partners Inc., said the market wants to see whether "the pulse of the Fed is beating at a fast rate with anxiety over the economy."
The Dow fell 74.25, or 0.7 percent, to 9,985.81. The Dow had traded below 10,000 several times this week, but hadn't closed below that level since July 6.
Broader market barometers also fell. The Standard & Poor's 500 fell 8.11, or 0.8 percent, to 1,047.22, while the Nasdaq fell 22.85, or 1.1 percent, to 2,118.69.
Falling stocks outpaced rising ones two-to-one on the New York Stock Exchange, where volume came to 1 billion shares.
First-time claims for unemployment benefits dropped to 473,000 last week, a bigger drop than analysts expected. First-time claims had jumped ominously the week before, going above 500,000 for the first time since November.
The latest jobless claims report suggests that hiring remains weak. In a healthy economy, weekly claims usually fall below 400,000. At the height of the recession in March 2009, weekly claims peaked at 651,000.
Investors are still worried about a persistently high unemployment rate of 9.5 percent and a general reluctance of employers to hire workers.
Bond prices traded in a tight range, further indication investors are nervous about the economy. Investors tend to buy up Treasurys, driving interest rates lower, when they are worried about economic growth.
The yield on the 10-year Treasury note dipped to 2.48 percent from 2.54 percent late Wednesday. Its yield helps set interest rates on mortgages and other consumer loans.
Long-term bond yields are hovering around levels not recorded since early 2009, when the country was in the depths of the recession and stocks hit 12-year lows.
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