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) -- Stocks sold off sharply Thursday in a violent session as fears about the eurozone intensified,

weekly initial jobless claims rose, and the

Senate inched closer to passing a financial regulatory overhaul.

The Dow finished at 10,068, plunging 376 points, or 3.6%. The tumble on the blue-chip average marks the Dow's largest point drop since February 2009. The

S&P 500

lost 43 points or 3.9% to 1072, and the


finished 94 points lower to 2204, or down 4.1%.

Peter Tuz, president of Chase Investment Counsel, said the combination of Europe being on edge, a jobless claims number that wasn't as robust as hoped and cautious outlooks from retailers were all contributing to Thursday's broad selloff.

"You're seeing bond yields lower across maturities. Lower yields are generally good for equities, but it's also indicative of a flight to safety, and in this case, I think people are saying 'get me into something safe,' " Tuz said. "We had a great run in the stock market from March to mid-April, and now people are taking money off of the table. There's weakness in Europe, and the U.S. economy is still sending mixed signals. There's talk of deflation now instead of inflation, and I think that has people feeling uncertain."

Overseas, Hong Kong's Hang Seng slipped 0.2%, and Japan's Nikkei fell 1.5%. The FTSE in London was lost 1.7%, and the DAX in Frankfurt shed 2%.

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The Economy

The Labor Department said initial weekly jobless claims increased by 3,000 to 471,000 in the week ended May 15, up from last week's upwardly revised claims of 446,000. Economists had expected claims to fall to 439,000, from last week's initially reported figure of 444,000 claims.

The Conference Board said leading indicators unexpectedly slipped 0.1% in April, after rising 1.3% in March. Economists had been projecting an increase of 0.2%.

The Philadelphia Federal Reserve Bank reported a better-than-expected increase in regional manufacturing activity in May. The May

Philly Fed Index came in at 21.4, exceeding expectations for a reading of 20.7.


U.S. banking sector appears to be making improvements as profits rose to $18 billion in 2010's first quarter, from $5.6 billion a year ago, according to the

Federal Deposit Insurance Corp.'s

quarterly industry report. Earnings, however, are historically weak as underperforming loans continue to trip up gains.

The Energy Information Administration said natural gas storage levels rose by 76 billion cubic feet in the week ended May 14. The increase was on the low end of analysts' projected injection range of 76 billion to 80 billion cubic feet, according to a Platts survey.

In the afternoon, Democrats in the U.S.

Senate cobbled together the 60 votes necessary to cut off debate on financial regulatory reform legislation, clearing the way for a conclusive vote on the package sometime soon.


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Company News

After the closing bell,



reported a first-quarter adjusted profit of 30 cents a share, which topped forecasts. But shares, which fell 4.4% during the regular session, continued selling off in extended trading.

Stocks finished significantly weaker across a broad cross-section of sectors. On the Dow,

Bank of America






General Electric





and were the session's worst performers, while












saw the mildest losses.


New York Stock Exchange

also saw strong performance in a pharmaceutical company with

K-V Pharmaceutical


showing one of the strongest gains at 4%, behind

Advance Auto Parts


, which improved 6.3%.

Millennium India Acquisition



Bank of Florida

( BOFL) led on the Nasdaq.

Meanwhile, the biggest drags on the NYSE were

New York & Co



Bank of Ireland



Wabash National


. On the Nasdaq,

Stewardship Financial





exerted the most pressure.

In earnings news,



reported adjusted earnings of 28 cents a share, which topped analysts' estimates by a penny.



said first-quarter earnings dropped 38% on lower margin rates, but the company reported a better-than-expected adjusted profit of 16 cents.

MF Global

( MF) posted an adjusted fourth-quarter loss of 17 cents a share, which was lower than the profit of a penny a share that analysts had been expecting. The company also said it plans to cut its work force by 10% to 15% in the first quarter.

Video game retailer



surpassed analysts' estimates with first-quarter earnings of 49 cents a share but issued second-quarter guidance that fell short of Wall Street's expectations.



said it will pull 900,000

General Electric


12-cup coffee makers from its shelves because of a fire hazard.


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Commodities and the Dollar

Following the EIA report, the June natural gas contract shed 5 cents to settle near $4.11 per million British thermal units. Meanwhile, crude oil for June delivery, which expires today, lost $1.86, to finish at $68.01 a barrel, and the more actively traded July contract fell $1.68 to settle at $70.80.

Elsewhere in commodity markets, the June

gold contract lost $4.50 to settle at $1,188.60 an ounce.

After moving higher earlier, the dollar was recently trading lower against a basket of currencies, with the

dollar index losing 0.4%.


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The benchmark 10-year Treasury rose 1 3/32, lowering the yield to 3.242%.

The two-year note increased 3/32, weakening the yield to 0.724%. The 30-year bond gained 2 9/32, diluting the yield to 4.115%.

--Written by Melinda Peer and Sung Moss in New York



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