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US stocks dive on weak economic data

US stocks dive on weak economic data
AFP
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First Published: Fri, Jan 30 2009. 10 32 AM IST
Updated: Fri, Jan 30 2009. 10 32 AM IST
New York: US stocks tumbled after weaker than expected jobless claims, new home sales and manufactured goods’ orders and amid concerns over company earnings.
The Dow Jones Industrial Average shed 226.44 points or 2.70% to close at 8,149.01, ending a three-day rally on Wall Street.
The tech-heavy Nasdaq dropped 50.50 points (3.24%) to 1,507.84 while the broad-market Standard & Poor’s 500 index fell 28.95 points (3.31%) to 845.14.
Colleen King of Schaeffer’s Investment Research said the sell-off came on “disappointing economic news, combined with dismal earnings reports,” giving investors an excuse for profit-taking.
The government released a series of data on Thursday showing worsening unemployment and weakness in the critical manufacturing sector and well as a record plunge in new home sales, underscoring the severity of a recession that has haunted the nation for about a year.
Combined with largely weak earnings announcements, the fresh data gave market participants “an excuse to sell stocks and take profits this session,” said analysts at Briefing.com.
Initial claims for unemployment benefits for the week ending 24 January increased to 588,000 from a revised 585,000 the previous week, the Labour Department said. The fresh data was above the consensus estimate of 575,000.
A key concern was a 159,000 jump in continued jobless claims to 4.77 million, with the rising trend reflecting the increasing difficulty of finding a new job, said Patrick O’Hare of Briefing.com.
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First Published: Fri, Jan 30 2009. 10 32 AM IST
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