Worries over persistent job losses pound stocks

Financial Crisis Posted on

Persistent job losses set off new worries about the economy and weighed on stocks Thursday.

The Dow Jones industrial average lost 150 points after continuing claims for unemployment benefits set their 16th straight weekly record. The number of newly laid-off workers seeking benefits fell last week but only after jumping a week earlier because of auto layoffs.

The report is causing the market to reconsider its optimism over early signs of recovery in the economy, which helped propel a two-month rally that lifted stocks off of 12-year lows in early March. On Wednesday, stocks gave up early gains and ended lower after the Federal Reserve said the economy was likely to shrink by more than expected this year.

Wall Street's concerns extended beyond jobs to fresh worries about the ability of governments to help grease economic activity with public spending. Credit ratings agency Standard & Poor's said Britain may have its rating cut because of rising debt levels, which would raise borrowing costs for the British government.

Even with governments pumping huge amounts of money into economies around the world there are still questions about how soon a rebound might take hold. In the U.S., home prices are still sliding and unemployment remains at a 25-year high.

Stephen Carl, a principal and head of equity trading at The Williams Capital Group, said the market is sliding in part because it isn't getting a steady diet of good news to draw in more buyers.

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