Stocks Tumble On Weak Employment, Retail Sales Data

New York, NY (AHN) - The U.S. markets opened lower Thursday after weekly unemployment data showed a 6 year high in the number of jobless claims. The major indices were not able to rally as poor July retail sales data from the major retailers provided pressure as well.

The Labor Department said the number of people applying for unemployment benefits rose to 455,000, the highest total since March 2002.

Retail sales data added to early negative sentiment as Wal-Mart said July same-store sales rose 3 percent, short of analyst expectations. 60 percent of the retailers that reported July sales came up short of estimates, which suggests growth of consumer spending is being pressured.

The Dow Jones Industrial average shed 224 points or 1.93 percent as 27 of 30 components finished Thursday lower. The index was pressured all session by American International Group, down 18 percent. The insurance company reported a second quarter loss of more than $5 billion on massive write-downs. Citigroup also pressured the index, down 6 percent, as reports surfaced the bank would buy back $7 billion in auction-rate debt to settle an investigation with regulators regarding sales practices of the product.

The S&P 500 declined 23 points or 1.8 percent while the Nasdaq Composite fell 22 points or 0.9 percent.

All 10 major economic sectors finished the session lower. Financials were the biggest laggard as the sector shed 5 percent with Bank of America, down 5 percent and Freddie Mac, down 9 percent, adding to the weakness from Citigroup and American International Group.

Crude oil saw a volatile session as it swung from positive to negative several times, ultimately settling at $120.02, up $1.44 a barrel.

The lone bright spot on the economic front came when the National Association of Realtors said its Pending Home Sales Index for June rose 5.3 percent to 89, from 84.5 in May.

Friday's session will see June wholesale inventories data along with a preliminary second quarter productivity reading.