Stocks sink as unemployment claims reach new high (7,000 at Starbucks; 1,000 at Allstate)

Source: AP

By MADLEN READ and TIM PARADIS

NEW YORK (AP) — Caution returned to Wall Street Thursday as unemployment claims reached a record high and new home sales hit a record low — two glaring signs that the economy is still in a deep slump. The major stock indexes gave back all of Wednesday's gains, and then some.

The Dow Jones industrial average sank 226 points, or 2.7 percent, while other indicators tumbled more than 3 percent. On Wednesday, stocks had soared on hopes that the government will take bad debt off banks' books.

Investors took a step back Thursday after getting some harsh reminders that it might be a while before the nation's 14-month-old recession ends, even if banks get more aid.

The Labor Department said the number of people continuing to receive unemployment benefits reached a seasonally adjusted 4.78 million week ending Jan. 17 — the highest level on records that go back to 1967. As a proportion of the work force, the total is the highest since August 1983.


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K&R

I was just a kid though.

Wall St. used to be so pleased when ten thousand people got pink slips.