Dow tumbles more than
100 points as investors jeer huge losses from carmaker, a sharp rise in
initial jobless claims and a sharp decline in existing home sales.
The
Dow Jones industrial average tumbled 1%, and the broader Standard &
Poor's 500 index index fell 0.7% from Wednesday's close. The Nasdaq
composite index sank 0.8% in early trading.
The National
Association of Realtors reported that sales of homes by homeowners fell
2.6% to a lower-than-expected 4.86 million annual rate in June. The
economy has slumped as home sales continue to decline, because American
homeowners have lost much of their purchasing power, leading to a
decline in consumer spending.
Also driving down stocks was a report
from the U.S. Labor Department that said new unemployment claims rose
much more than expected last week. New applications filed for jobless
benefits rose by a seasonally adjusted 34,000 to 406.
Furthermore, the struggling U.S. automaker Ford reported
a huge $8.7 billion net loss for the second quarter. The third largest
automaker by sales said it would restructure its North American product
line to include more of the fuel-efficient vehicles, as rising gas
prices have severely hampered consumer interest in big trucks and SUVs.
Shares of Ford fell 6% in early trading.
Internet retailer Amazon.com
, posted better-than-expected second-quarter earnings after the
market's close Wednesday. Amazon also boosted its 2008 revenue
projections, as CEO Jeff Bezos said high gasoline prices may be luring
shoppers to its Web site.
Oil prices rose 63 cents to
$125.07 a barrel Thursday after falling nearly $4 Wednesday on
continued concerns about reduced demand. Oil has plummeted about $22
from its high of $147.27 set on July 11.
Treasury prices
rose Thursday, bringing the yield on the benchmark 10-year note down to
4.09%. Bond prices and yields move in opposite directions.