Stocks Sharply Lower on Gloomy Fed Outlook

U.S. stocks were sharply lower at Thursday’s start, with investors picking up on the Federal Reserve’s gloomy outlook on the economy. Downbeat economic data from China and the euro zone also weighed on investor sentiment. The Dow Jones Industrial Average lately fell 372.13 points to 10,752.71. The Standard & Poor’s 500 Index declined 38.30 points to 1,128.46. The Nasdaq Composite Index shed 85.54 points to 2,452.65.

The Federal Reserve’s ‘Operation Twist’ to bring down bond yields and stimulate the economy is likely to cause pain for the nation’s largest pension funds, already struggling with funding shortfalls from the recent stock market decline.

New requests for compensation in the week ended Sept. 17 fell by 9,000 to a total of 423,000, the Labor Department said. Initial claims from two weeks ago were revised up to 432,000 from an original reading of 428,000.

President Barack Obama is marketing his massive jobs proposal from an outdated bridge that links the home states of his two chief congressional Republican rivals, a symbolic and cheeky maneuver designed to apply pressure on the GOP and convey resolve in the face of a sputtering economy.

The euro currency project is in danger due to member states’ runaway spending and the resulting sovereign debt crisis, a European Central Bank study warned on Thursday amid mounting global calls on Europe to take more decisive action.

United Technologies Corp.(UTX) said it would buy aircraft-parts supplier Goodrich Corp.(GR) for $16.5 billion in a deal that will increase its exposure to the world’s rapidly expanding commercial aircraft fleet.

FedEx Corp.(FDX) cut its earnings expectations for the fiscal year ending in May due to slowing global economic growth. It now expects to earn between $6.25 and $6.75 per share for fiscal 2012, compared with a previous estimate of $6.35 to $6.85 per share.

Oil prices are down sharply on worries the economy could slow further. Benchmark crude on Thursday plunged $5.16, or 6 percent, to $80.76 per barrel in New York. It hasn’t been that low since Aug. 19. Brent crude fell $4.62, or 4 percent, to $105.74 in London.

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