NEW YORK (AP) — Stocks are sharply lower in early trading Thursday, despite more signs that the economy might be stabilizing.
Investors are putting the brakes on the market’s recent rally, which gave the Dow Jones industrials seven straight days of gains through Wednesday, hitting another high for the year and matching its longest winning streak since July.
Analysts say the market has been running out of reasons to move higher and is now looking for more convincing signs of recovery in the economy before resuming its upward march.
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The latest report on unemployment benefits failed to excite investors. The Labor Department reported before the market opened that first-time jobless claims fell 10,000 last week to 570,000, just shy of economists’ expectations for 565,000.
Workers continuing to file for benefits, however, fell more than expected, declining to 6.13 million from 6.25 million in the previous week. It was the lowest level for continuing claims since early April. Economists had been expecting claims to total 6.2 million.
Meanwhile, a Commerce Department report showed the nation’s economy shrank at a 1 percent annualized rate in the second quarter. The updated figure was unchanged from an earlier, preliminary reading on the nation’s GDP, which measures the value of all goods and services produced within the U.S. Economists had been predicting the figure would be revised lower to a 1.5 percent decline.
Trading has been erratic over the past week, even amid data showing improvements in housing and consumer confidence. Investors are worried about extending the market’s impressive spring and summer rally without signs of actual economic growth.
The Dow fell 70.21, or 0.7 percent, to 9,473.31. The Standard & Poor’s 500 index fell 10.58, or 1.0 percent, to 1,017.54, while the Nasdaq composite index fell 27.87, or 1.4 percent, to 1,996.56.
Boeing Co. was the only Dow Jones component to rise in morning trading besides American Express Co. after saying its long-delayed 787 aircraft will be ready for its first flight by the end of this year.
About four stocks fell for every one that rose on the New York Stock Exchange, where volume came to a light 132.8 million shares, down from 167.6 million at the same time on Wednesday. With many traders on vacation, trading volume has been extremely light over the past week and is expected to remain so through the end of the summer. Light volume can add to the market’s choppiness.
In other trading, the Russell 2000 index of smaller companies fell 10.50, or 1.8 percent, to 573.52.
Commodities like oil and gold fell, while the dollar rose against other major currencies. Light, sweet crude for October delivery dropped $1.39 to $70.04 a barrel on the New York Mercantile Exchange.
Bond prices were little changed ahead of an auction of seven-year notes.
The yield on the benchmark 10-year Treasury note held steady at 3.44 percent.
Stocks declined across a broad swath of sectors, with the sharpest losses in energy and health care stocks.
Boeing shares jumped $3.88, or 8.1 percent, to $51.70.
Elsewhere in corporate news, luxury homebuilder Toll Brothers Inc. said it lost $472.3 million in its fiscal third quarter due to a tax-related allowance and a write-down. Toll Brothers would have been profitable had it not been for the charges. The company has said there are signs of improvements in some markets.
Shares dropped 80 cents, or 3.5 percent, to $22.34. Other homebuilders also fell sharply after recent gains. DR Horton Inc. tumbled nearly 6 percent, losing 82 cents to $12.97.
During a rally that has sent stocks up by more than 45 percent since March, traders have typically welcomed better-than-expected economic reports by buying heavily in the market. But that hasn’t been the case this week, with stocks little changed from last Friday’s levels.
Overseas, Asian stocks fell after China said it would cut excessive investment in some industries. Japan’s Nikkei stock average lost 1.6 percent, while China’s main index fell 0.7 percent.
In afternoon trading, Britain’s FTSE 100 dipped 0.1 percent, Germany’s DAX index fell 0.5 percent, and France’s CAC-40 fell 0.2 percent.
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