Thu, April 08, 2010
Business > Markets

Wall St falls as jobless data, Greece weigh

2010-04-08 15:17:14 GMT2010-04-08 23:17:14 (Beijing Time)

Wall Street fell on Thursday as an unexpected rise in jobless claims disappointed investors hoping for a steady labor market recovery and on persistent fears that Greece's debt crisis would spread through Europe.

Cyclical stock sectors, such as energy, materials and industrials, which are sensitive to economic uncertainty, led the decline. Caterpillar Inc (CAT.N) fell 1.3 percent to $63.64, and was the biggest drag on the Dow industrials.

Gloom in Europe offset better-than-expected March sales from top U.S. retailers, who benefited from an early Easter holiday to beat Wall Street expectations.

Overseas markets pounded Greek bonds and local banking stocks, driving the country's borrowing costs to new highs and pushing it closer to tapping a last-resort safety net.

"The news from Greece has progressively got a little bit worse over the last few days," said Eric Kuby, chief investment officer at North Star Investment Management Corp in Chicago. "You also had the initial jobless claims that were also a little bit worse than expected."

The Dow Jones industrial average (.DJI) dropped 35.14 points, or 0.32 percent, to 10,862.38. The Standard & Poor's 500 Index (.SPX) fell 5.17 points, or 0.44 percent, to 1,177.28. The Nasdaq Composite Index (.IXIC) lost 12.95 points, or 0.53 percent, to 2,418.21.

Initial claims for state unemployment benefits unexpectedly rose 18,000 to 460,000, the Labor Department said. Economists expected claims to edge down to 435,000.

The jobless data disappointed investors who had grown more optimistic about the labor market, but some economists said the rise was due to seasonal factors.

North Star's Kuby said the stock market continued to show underlying strength and was still in an uptrend after rising to levels not seen in a year and a half earlier this week.

Overall, U.S. same-store sales rose 9.1 percent in March, beating Wall Street's forecast for a 6.3 percent increase, according to Thomson Reuters data. More than 90 percent of the 28 retailers that Thomson Reuters tracks topped estimates.

The improved sales spread from discounters to department stores and teen clothing chains. Target Corp (TGT.N) was up 3 percent to $55.60. The S&P retail index (.RLX) rose nearly 1 percent.

UAL Corp (UAUA.O), parent of United Airlines, jumped 9 percent to $20.63 after reports the carrier was in merger talks with S Airways Group Inc (LCC.N).


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