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Spike in applications for unemployment benefits last week sends stocks slightly lower
NEW YORK (AP) ' Stocks edged lower in early trading Thursday after the government reported that claims for unemployment rose last week, a sign that layoffs are increasing.
First-time applications for unemployment benefits rose last week to 414,000. Economists had expected a slight fall to 405,000. The prior week's estimate of new claims was also revised higher.
Thirty minutes after the market opened, the Dow Jones industrial average was down 42 points, or 0.41 percent, to 11,373. The Dow jumped 275 points Wednesday after a German court cleared the way for that country's participation in the bailout of Greece and other European countries.
The Standard and Poor's 500 index was down 8, or 0.7 percent, to 1,190. The Nasdaq composite fell 12, or 0.5 percent, to 2,536. The Nasdaq had been up in the first few minutes of trading.
Weekly applications for unemployment benefits are a closely-watched figure on Wall Street. Rising claims can add to concerns that the job market is stalled and the U.S. economy is headed for another recession. Applications need to fall below 375,000 to indicate sustainable job growth. Last week the government reported there was zero job growth in the U.S. economy in August.
Not all of the economic news Thursday was negative. American exports of cars, airplanes and other goods reached an all-time high in July, the Commerce Department reported. Economists said the jump in exports suggest future growth in the U.S. economy.
Investors are waiting for two-closely watched speeches Thursday. Federal Reserve Chairman Ben Bernanke will give a speech in the afternoon detailing his outlook for the U.S. economy. President Barack Obama will appear before Congress tonight and lay out his jobs plan.