NEW YORK (TheStreet) -- Stocks fell sharply in the final hour of trading on Thursday as tech stocks reversed early gains and mid-cap stocks came under fire.
The Dow Jones Industrial Average which was negative for most of the session, spiked lower in the final hour of trading. The blue-chip index finished down 76 points, or 0.7%, at 10,662. The S&P 500 slid 9 points, or 0.8%, to 1,125, dipping back below the key technical level of 1,130. The Nasdaq, which had been up the majority of the day, also succumbed to the selling pressure, losing 7 points, or 0.3%, to close at 2,327.
Walt Disney (DIS),JPMorgan Chase (JPM),General Electric (GE) and Bank of America (BAC) dragged the Dow lower, declining over 2% each.
Alcoa (AA) and Hewlett Packard (HPQ) were among the few gainers on the Dow, up 0.3% and 1.5% respectively.
Of the Dow's 30 components, 26 ended in the red. The index itself fell for a second straight session, but is still up 6.4% in September, historically one of the worst months for stocks.
From a sector standpoint, financials, transportation and capital goods stocks were among the worst hit. Overall market breadth on the New York Stock exchange was also very negative with decliners outnumbering advancers by a 7-2 ratio.
The session started out ugly as European equities markets were in broad decline after a survey of purchasing managers in the eurozone came in at 53.8, down from 56.2 in August. Ireland's economy also contracted, adding to concerns about Europe's economic recovery.
The FTSE in London lost 0.9%, and the DAX in Frankfurt was shed 0.4%. It was a quiet day for Asian markets, with Hong Kong's Hang Seng and Japan's Nikkei closed for holidays.
Then before the opening bell, the Labor Department said initial weekly jobless claims
rose by 12,000 to 465,000 in the week ended Sept. 18, exceeding the 450,000 claims that economists had been expecting, according to Briefing.com.
"The 10-year average for unemployment claims is 393,000 and that included a period when we had a real estate boom. We are still about 70,000 above that average," Michael Pento, senior economist at Euro Pacific Capital, told TheStreet
."Even though the so-called recession has ended, there is no job growth," said Pento, pointing out that even though layoffs may be slowing, companies were still not hiring.
In other economic news, the National Association of Realtors, which said existing-home sales
rose to 4.13 million in August from 3.84 million previously, meeting Wall Street's expectations, according to Briefing.com.
The Conference Board's August leading indicators index rose 0.3%, exceeding expectations for growth of 0.1%. August's level compares with July's 0.1% increase.
Jay Suskind, senior vice president at Duncan Williams, said the morning's economic reports were pretty benign."Jobs data didn't suggest any type of rebound, reinforcing expectations for moderate GDP growth of 1% to 2%. Labor and housing are the two areas that are keeping the economy from improving so until there's a turnaround, the economy will continue to chug along."