Stocks drop on job­less claims, woes in Europe

Los Angeles Times - - Daily Market Roundup - as­so­ci­ated press

A Septem­ber stock rally weak­ened Thurs­day as in­vestors were dis­ap­pointed by a jump in un­em­ploy­ment claims and more signs of trou­ble for Europe’s econ­omy.

The mar­ket got off to a bad start and stayed in a funk all day. Ap­pli­ca­tions for un­em­ploy­ment ben­e­fits rose un­ex­pect­edly last week, and a re­port out of Europe showed a lower read­ing on busi­ness ac­tiv­ity in the 16 coun­tries that use the euro.

More bad news came from Ire­land, which re­ported that its econ­omy shrank 1.2% in the sec­ond quar­ter.

The Dow Jones in­dus­trial av­er­age closed down nearly 77 points, its sec­ond day of losses.

The Stan­dard & Poor’s 500 in­dex, the bench­mark most of­ten used by pro­fes­sional in­vestors, fell be­low a key thresh­old watched by tech­ni­cal an­a­lysts. Gold hit an­other record as traders sought safe havens.

The slide raised doubts about whether a three-week rally that vaulted stocks higher in Septem­ber would con­tinue.

The Dow is still up 6.5% for the month, but is 4.8% be­low its 2010 high reached April 26. For the year, it’s up 2.2%.

Traders were dis­ap­pointed to see first-time un­em­ploy­ment claims rise last week, break­ing a re­cent trend of de­clines.

The La­bor Depart­ment said claims jumped by 12,000 and are still at lev­els that sig­nal em­ploy­ers are not sig­nif­i­cantly adding new jobs.

“It’s all about jobs right now,” said Jack Ablin, chief in­vest­ment of­fi­cer at Har­ris Pri­vate Bank. “When claims pick up, that’s a wor­ri­some sign.”

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