NEW YORK (AP) -- Airline stocks plunged Thursday amid a broader market sell-off driven by new reports that said more Americans are unemployed and paying more for everyday goods.

The Dow Jones industrial average at one point in morning trading was down more than 500 points. All major market indexes fell more than 4 percent.

Driving the downturn was growing fear that consumers are getting pinched at the grocery store and the gasoline pump â¿" and that unemployment numbers remain bleak.

The Labor Department said the number of people applying for unemployment benefits rose back above 400,000 last week. Still, the four-week average, a more reliable gauge of the job market, fell to the lowest level since mid-April. The report suggests that the economy is creating jobs but not nearly enough to lower the high unemployment rate.

The department also said Thursday that consumers paid more for staples including gas, food and clothes last month, pushing prices up by the most since the spring. An increase in gas prices accounted for much of the swing.

Oil prices fell sharply Thursday along with the broader market. Benchmark West Texas Intermediate crude for September delivery tumbled $23.75, more than 4 percent, to $83.83 per barrel on the New York Mercantile Exchange.

Airlines usually trade in the opposite direction of oil prices because fuel is one of their biggest costs. But higher prices could spur Americans to postpone planned vacations or business trips, raising worries about a downturn in air travel.

In midday trading, Delta Air Lines Inc. lost 50 cents, or 6.4 percent, to hit $7.30. United-Continental Holdings Inc. fell 7.2 percent, or $1.36, to $17.60. American Airlines parent AMR Corp. slid 26 cents, or 7 percent, to $3.54. US Airways Group Inc. fell 37 cents, or 6.5 percent, to $5.32.

In spite of a small reprieve in the past week, shares of all the major U.S. airlines have experienced double-digit percentage declines since the start of the third quarter.

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