NEW YORK:US stocks closed at six-year lows Thursday after data showed five million people were collecting unemployment benefits, a record high number that underlined the growing depths of the recession.
The Dow Jones Industrial Average sank 89.68 points (1.19 per cent) to end at 7,465.95, its lowest closing level since October 9, 2002.
The tech-dominated Nasdaq dropped 25.15 points (1.71 per cent) to 1,442.82 and the broad-market Standard & Poor’s 500 index shed 9.48 points (1.20 per cent) to 778.94.
Markets fell on continued economic concerns, with financial stocks leading the decline, as investors remained jittery about the sustainability of asset valuations on their books, analysts at Charles Schwab & Co said.
Shares were unable to maintain early gains as sellers entered the action and pushed the Dow index below its November lows posted Tuesday.
The market was stung by a series of data released Thursday underscoring deepening US recession.
The gloomiest report showed continuing claims for unemployment benefits rising by 170,000 to 4.987 million for the week ending February 7, another record high, according to the Labour Department.
It also said that although initial claims for government unemployment benefits were unchanged at 627,000 for the week ending February 14, the much watched four-week moving average had increased in each of the last four weeks.
“Continuing claims are at a record high. They underscore the difficulty in finding a new job at this juncture and make it apparent for many people why they should be saving more money if possible,” said Patrick O’Hare of Briefing.com.
“The increased propensity to save bodes well for consumer balance sheets, but it will be a drain on GDP since increased savings means less spending by the consumer,” he said.
Bank stocks faced the biggest rout. Citigroup fell by 2.51 per cent to US$13.75, Bank of America by 14 per cent to US$3.93, JPMorgan Chase by 4.23 per cent to US$20.60 and Wells Fargo by 7.97 per cent to US$12.01. - AFP
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