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News >  Business

Stocks tumble on oil, jobs news

Associated Press

Stocks plunged Thursday, with the Dow Jones industrials shedding nearly 112 points, as investors were pummeled by a sharp climb in oil prices, rising unemployment and a disappointing 2005 forecast from General Motors Corp.

Crude oil futures extended their gains, surpassing $48 per barrel and closing at a six-week high, as investors worried about declining U.S. reserves, the Iraqi elections and evidence of OPEC production cuts. A barrel of light crude was quoted at $48.04, up $1.67, on the New York Mercantile Exchange.

Wall Street also was unnerved by the latest first-time jobless claims report, which showed a jump of 10,000 claims to 367,000 last week, a three-month high. After Friday’s modest job creation report, the labor market remained a major concern for investors.

But while the markets held on with only modest losses through most of the day, General Motors’ outlook — at the low end of Wall Street expectations — sent stocks tumbling.

“You get a little bad news, and there’s nobody willing to step up and buy on the dip,” said Bryan Piskorowski, market analyst at Wachovia Securities. “It’s the same pattern we’ve seen nearly every day this year. Investors are being very conservative and playing this day-to-day. It’s not new to the market that GM’s robbing Peter to pay Paul, but it was enough to trigger some sell programs.”

The Dow Jones industrial average fell 111.95, or 1.05 percent, at 10,505.83.

Broader stock indicators also fell sharply. The Standard & Poor’s 500 index was down 10.25, or 0.86 percent, at 1,177.45, and the Nasdaq composite index lost down 21.97, or 1.05 percent, at 2,070.56.

Mediocre economic data and surging oil prices, combined with continued investor unease about the profit outlooks for 2005, have overshadowed strong earnings reports this week from tech heavyweights Intel Corp. and Apple Computer Inc.

“These (earnings) numbers are unambiguously good, and you’re seeing a nice runup in those stocks, but they aren’t spilling over into the rest of the sector,” said Russ Koesterich, U.S. equity strategist at State Street Corp. in Boston.

Analysts said investor nervousness has pressured stocks, but strong economic reports and more positive earnings statements could boost the market.

Declining issues outnumbered advancers by about 4 to 3 on the New York Stock Exchange, where volume was moderate.

The Russell 2000 index of smaller companies was down 3.06, or 0.5 percent, at 610.13.

Overseas, Japan’s Nikkei stock average fell 0.83 percent. In Europe, Britain’s FTSE 100 closed up 0.35 percent, France’s CAC-40 gained 0.47 percent for the session, and Germany’s DAX index climbed 0.08 percent in late trading.

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