Stocks on Wall Street Rack Up More Big Losses

Updated from 3:22 p.m. EST

Stocks on Wall Street had a volatile morning Thursday before selling off sharply late in the session as traders continued to grapple with signs of economic malaise and fret about the fate of the auto industry.

The Dow Jones Industrial Average tumbled 444 points, or 5.3%, to 7554. The S&P 500 slumped 54 points, or 6.7%, to 752, putting it below its 2002 bear market low of 776, and the Nasdaq dropped 70 points, or 5.1%, to 1316.

On Wednesday, the market also fell hard, and when the new session arrived another set of grim economic data kept the sellers in control. The Labor Department reported that jobless claims for the week ended Nov. 15 had increased by 27,000 to reach 542,000, the highest level since 1992. Economists had anticipated claims numbers to come in at 503,000.

"In past recessions, investors eventually ignored bad employment data, having been numbed to the data by previous data and plentiful evidence of impending doom," Tony Crescenzi, chief bond market strategist for Miller Tabak, wrote on his RealMoney.com blog.

Crescenzi said that investors will still have to wait for additional indications of the depth and severity of the downturn before determining that the market has discounted the worst of what is to come. "Data need not get better to spark a rally, they need only stop getting worse," he wrote.

Meanwhile, economists at the University of Michigan said the U.S. is indeed in a recession and that the worst won't come until the middle of next year.

A November manufacturing survey from the Philadelphia Federal Reserve yielded an index reading of negative 39.3 for November, worse than minus 37.5 the previous month. Economists were anticipating a reading of negative 35.