Stocks Drop at Open on Economy Fears
U.S. stocks opened lower on Thursday as better-than-expected weekly data on U.S. jobless claims failed to offset worries about the global growth.The Dow Jones industrial average lately fell 94.64 points, or 0.75 percent, to 12,509.89. The S&P 500 Index dropped 13.80 points, or 1.03 percent, to 1,327.65. The Nasdaq Composite lost 40.05 points, or 1.39 percent, to 2,847.93.
The number of people seeking U.S. unemployment benefits plunged last week to the lowest level in four years. But a major reason for the drop was some automakers skipped traditional summer shutdowns to keep up with sales, leading to fewer temporary layoffs of autoworkers. Weekly applications dropped by 26,000 to a seasonally adjusted 350,000, the Labor Department said Thursday. The four-week average, a less volatile measure, fell to 376,500.
The Federal Reserve signaled that a further economic slowdown would bring growing support among policy makers for additional steps to spur the three-year expansion. A few members of the Federal Open Market Committee said the Fed should ease policy to move the economy toward its targets for full employment and stable prices, according to minutes of the June 19-20 meeting released yesterday in Washington.
European leaders are testing the latest version of their debt crisis strategy in Spain, granting Prime Minister Mariano Rajoy more time to reduce the budget deficit in exchange for deeper spending cuts.
Italy’s national statistics body ISTAT threatened on Thursday to cease issuing data on the economy, saying it had been crippled by government spending cuts aimed at reducing national debt and righting public finances.
It’s been a scandal-filled few months for banks. JPMorgan Chase revealed a $2 billion trading loss, triggering an investigation by the government and hearings in Congress. Then the large banks were implicated in a global dust-up over interest rate manipulation.