Wall Street tumbles on economy worries

January 30th, 2009 - 8:34 am ICT by IANS  

New York, Jan 29 (Xinhua) Wall Street tumbled Thursday as a series of economic data and earnings reports suggested that the economic conditions were deteriorating.The US Labor Department reported that the number of continuing unemployment benefit claims increased by 159,000 to 4.78 million during the week ending Jan 17, the highest on records since 1967 and much worse than economists’ expectation of 4.65 million.

Meanwhile, the number of initial jobless benefit claims in the week ending Jan 24 was only 1,000 lower than the 26-year high of 589,000 reached in late December.

The US Commerce Department said Thursday that new orders for durable goods dropped by 2.6 percent last month, worse than the 2 percent decline economists expected.

A separate report from the Commerce Department showed that new home sales fell 14.7 percent in December to a seasonally adjusted annual rate of 331,000, from a downwardly revised November figure of 388,000. It was the lowest on records dating back to 1963.

Earnings reports added to the recession worries. Ford Motor. posted a fourth-quarter loss of $5.9 billion Ford announced its decision to cut about 20 percent of the workforce in its credit unit, which means 1,200 jobs.

Shares of financial companies declined sharply after Wednesday’ s rally on “bad bank” proposal.

The Dow Jones industrial average fell 226.44 points, or 2.70 percent, to 8,147.97. The Standard & Poor’s 500 Index lost 28.95 points, or 3.31 percent, to 845.14. The Nasdaq Composite Index slid 50.50 points, or 3.24 percent, to 1,507.84.

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