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Wall Street declines after weak reports on gross domestic product, jobless claims

Wall Street declines after weak reports on gross domestic product, jobless claims

Wall Street fell in early trading Thursday after a pair of reports showed that the U.S. economy nearly stalled in late 2007 and that unemployment claims rose last week.
Investors were disappointed to see the Commerce Department report saying fourth-quarter gross domestic product rose by a smaller-than-expected annual rate of 0.6 percent. And separately, the Labor Department reported that first-time unemployment claims rose last week by 19,000 to 373,000, the highest level since late January.
The data bolstered investors' concern that the economy is weakening sharply _ and those worries escalated further Thursday when the dollar dipped to a new low against the 15-nation euro.
Meanwhile, corporate news was similarly downbeat. Sprint Nextel Corp. posted a $29.5 billion (euro19.51 billion) loss in the fourth quarter after writing down the remaining value of its Nextel Communications buy and losing customers. It also slashed its dividend, and shares tumbled 70 cents, or 7.8 percent, to $8.25.
In the first hour of trading, the Dow Jones industrial average dropped 89.95, or 0.71 percent, to 12,604.33.
Broader stock indicators also lost ground. The Standard & Poor's 500 index declined 8.35, or 0.61 percent, to 1,371.67, and the Nasdaq composite index lost 11.19, or 0.48 percent, to 2,342.59.
Government bonds rose as stocks fell. The yield on the benchmark 10-year Treasury note, which moves opposite its price, sank to 3.74 percent from 3.85 percent late Wednesday.
The stock market this week has been hit by a series of complex developments, including regulatory changes that should enable mortgage companies Fannie Mae and Freddie Mac to put badly needed liquidity into the housing sector. There were also indications that funding may be found for ailing bond insurers.
Housing market news was dim. Thornburg Mortgage Inc. plunged after the mortgage lender said it has received margin calls _ calls for immediate repayment of debt _ on a portfolio of securities backed by alt-A mortgages. Alt-A mortgages are those given to customers with little credit history or minor credit problems. Thornburg fell $2.29, or 20 percent, to $9.25.
Crude oil jumped $1.25 to $100.89 a barrel on the New York Mercantile Exchange. Gold prices also advanced.
The Russell 2000 index of smaller companies was down 8.58, or 1.20 percent, at 707.86.


Updated : 2021-05-17 11:35 GMT+08:00