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NEW YORK (TheStreet) -- U.S. stocks finished deep in the red on Thursday, driven lower by a rekindling of worries about Europe's debt crisis and uneasiness about an upcoming speech from Federal Reserve Chairman Ben Bernanke.

An elevated weekly initial jobless claims report also took a bite out investor risk appetite, pushing the safe-haven benchmark 10-year Treasury up 7/32, diluting the yield to 1.632%. The greenback rose 0.19%, according to the

dollar index.


Dow Jones Industrial Average

dropped nearly 107 points, or 0.81%, to close at 13,000.71. Earlier in the session, the blue-chip index scraped a low of 12,979, dipping below the 13,000 mark on an intraday basis for the first time since Aug. 3.

Twenty-eight of the Dow's 30 components finished with losses The biggest percentage decliners were











S&P 500

sank 11 points, or 0.78%, to settle at 1399.48, its first close below 1400 since Aug. 6.



took the biggest hit, surrendering more than 32 points, or 1.05%, to finish at 3049.

The weakest sectors in the broad market were basic materials, capital goods, conglomerates, energy and technology.

Decliners outpaced advancers by a more than 2-to-1 ratio on the New York Stock Exchange and a 3-to-1 ratio on Nasdaq. Volume totaled 2.45 billion on the Big Board and 1.22 billion on the Nasdaq.

The latest data on weekly initial claims was disheartening ahead of the August jobs report, which is due next Friday. First-time filers totaled 374,000 for the week ended Aug. 25, the highest level in a month and above the consensus view of 370,000. Continuing claims for the week ended Aug. 18 fell 5,000 to 3.32 million.

"Nonfarm payrolls due next Friday is currently predicted to show a gain of just 115,000 fresh hires and the pace of improvement in the weekly initial claims series seems insufficiently strong to argue against that reading at this time," said Andrew Wilkinson, chief economic strategist at Miller Tabak.

Meanwhile, the Bureau of Economic Analysis reported that personal income increased 0.3% in July after rising 0.3% in June. Personal spending rose 0.4% after coming in basically flat the prior month. Economists had expected that personal income would rise in July by 0.3% and that spending rose 0.4%.

"The pattern of U.S. growth is not uniform, and this suggests that any policy response needs to move away from the generic and become more sophisticated," said Paul Donavan, a global economist at UBS.

The FTSE in London finished down 0.42% and the DAX in Germany closed off by 1.64% as German unemployment in August rose for a fifth straight month and data showed that euro area economic confidence fell to a three-year low in August.

Also, the yield on Spain's ten-year bonds jumped in the wake of Spanish Prime Minister Mariano Rajoy's comments that the country has decided to hold off on seeking a sovereign bailout -- pending more clarity on aid conditions -- after his meeting with French President Francois Hollande.

The Hong Kong Hang Seng index settled lower by 1.19% and the Nikkei in Japan settled lower by 0.95% after Japan posted a larger-than-expected 0.8% drop in retail sales in July.

Global economic fears were creeping in ahead of the much awaited Jackson Hole, Wyo. economic symposium this weekend, where Ben Bernanke is slated to deliver a speech entitled "Monetary Policy Since the Crisis" on Friday. While the chairman has used this venue in the past to signal plans for additional monetary stimulus, there is some doubt that he will do so this time around, given recent improvement in economic data.

In addition, European Central Bank President Mario Draghi has pulled out the symposium, citing a busy schedule. Other members of the ECB's executive board have decided not to attend the symposium either, suggesting that a lot of work remains to be done before the next ECB policy meeting on Sept. 6 -- expected to be followed by details of how the central bankers plan to support the purchases of sovereign debt.

October crude oil futures settled down 87 cents at $94.62 a barrel and December gold futures lost $5.90 to settle at $1,657.10 an ounce.

On the corporate front,



shares dove nearly 20% after the communications networking equipment provider reported fiscal third-quarter loss of 4 cents a share, compared with the consensus estimate of a 2-cent loss. For its fiscal fourth quarter, Ciena expects sales between $455 million and $480 million, below analysts' projections of $499.49 million.



, the streaming music company, posted

break-even results

for its fiscal second quarter on Wednesday and provided strong guidance. Shares surged more than 14%.

Standard & Poor's said it is removing



from its benchmark S&P 500 index. The struggling department store retailer will be nixed from the index after the close of trading on Sept. 4, replaced by

LyondellBasell Industries


. Sears shares tumbled 8%, while LyondellBasell shares gained 4%.



, the digital video-recording technology company, reported a narrower second-quarter loss on Wednesday as it gained 23,000 subscribers for the quarter ended in July. TiVo said it expects fiscal third-quarter revenue from service and technology to range from $57 million to $59 million. Analysts are forecasting $57 million. The stock fell 3.4%.

British bank



named Antony Jenkins, head of its retail and business banking operations, as its new CEO. He replaces Bob Diamond, who resigned in the wake of the Libor rate-fixing scandal. American depositary receipts of Barclays slumped 1.7%.



reported that its comparable sales for August were up 9%. The stock added 2.7%.

--Written by Andrea Tse in New York.

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Andrea Tse