Dow falls 340 points amid unemployment and retail sales rates news
Thursday, September 4, 2008
The exact reason for the drop is unknown, with different news agencies pointing to different causes. The New York Times cites a rise in unemployment numbers released Thursday by the U.S. Department of Labor and a fall in retail sales released by several large corporations.
According to the Associated Press, the number of people claiming weekly unemployment benefits rose 15,000 last week to 444,000, which, according to The New York Times is near a five-year high.
“This morning’s employment numbers continue to indicate that the labor sector remains soft at best and looks to continue to shed jobs throughout the remainder of the year,” Joseph Brusuelas, chief economist at Merk Investments, said in a statement to The New York Times.
One major corporation that posted a gain in sales was Wal-Mart, with a 3 percent boost, which resulted in a one penny loss in their stock. Fellow retailer Target posted a sales loss. Shares of energy companies ExxonMobil and Chevron fell by 1.5 and 3 percent, respectively.
The other two major American stock indices fell too. The S&P 500 fell 2.99 percent while the Nasdaq composite index fell 3.20 percent. The Dow's 344.65-point fall left the index at 11,188.23, a 2.99 percent decrease from the close of trading Wednesday.
According to The New York Times, the drop is the largest since June of this year, but an expected announcement Friday of August unemployment data could cause the index to rise.
The New York Times and the Associated Press both report that the number of jobs in the service sector rose in August according to research done by the Institute for Supply Management. This is the first rise in the number of jobs in several months.
CNNMoney.com points to the rise in the price of Treasury bonds as a reaction to data released Wednesday that the American economy would continue to be slow in 2009.