US stocks tumble on weak economic data

January 23rd, 2009 - 6:36 am ICT by IANS  

New York, Jan 23 (Xinhua) US stocks tumbled Thursday as disappointing economic data of housing and unemployment and corporate earnings report weighed on the market. Technology shares plunged as Microsoft Corp.’s quarterly profits missed analysts’ expectations. Its profit fell to $4.17 billion from $4.71 billion, or 11 percent lower. Microsoft results led the Nasdaq composite index down.

Government data suggested that the job and housing market remained weak. The US Labour Department reported that during the week ended Jan 17 initial claims for jobless benefit jumped 62,000 to a seasonally adjusted 589,000 from a revised 527,000 the previous week. It has matched the highest level in 26 years.

A separate report from the US Commerce Department showed that housing dropped to an all-time low annual rate of 550,000 units last month. The December number was 15.5 percent below November’s figure, which had been the weakest since records began in 1959.

Meanwhile, investors are still worried about the banking sector. It’s reported that former Merrill Lynch CEO John Thain agreed to leave Bank of America. The news came as Merrill Lynch’s unexpected massive fourth-quarter loss forced Bank of America to turn to US Treasury for another rescue funding package.

The Dow Jones industrial average, which had been down as much as 271 points, has closed down 105, or 1.28 percent, at 8,122. The Standard & Poor’s 500 index fell 12.74 points, or 1.52 percent at 827.50, and the Nasdaq composite index is off 41 points to end at 1,465.

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