Stocks sink after weak jobs report; oil drops
By MATTHEW CRAFT, Associated Press
Jun 23, 2011 9:17 AM CDT
Trader Gerard Farco works on the floor of the New York Stock Exchange Wednesday, June 22, 2011. A downbeat assessment of the U.S. economy from the Federal Reserve hit global stocks Thursday, June 23, while the euro faltered ahead of a meeting of EU leaders where Greece's debt troubles are likely to...   (Associated Press)

An unexpected jump in claims for unemployment benefits and plummeting oil prices are driving U.S. stocks lower in early trading Thursday.

The number of people applying for unemployment benefits rose to 429,000 last week, much higher than economists expected and the largest rise in four weeks. Applications have stayed above 400,000 for more than two months, the latest sign that hiring has weakened from earlier this year.

"This is no longer looking like a small soft patch," said Lawrence Creatura, who manages a stock portfolio at Federated Investors. "It's beginning to look more like quicksand."

Oil prices fell 5 percent after the International Energy Agency said 60 million barrels of oil would be released from reserves to make up for the loss of Libyan exports. That sent Exxon Mobil Corp., Chevron Corp. and other energy stocks sharply lower.

In contrast, airlines stand to benefit from cheaper fuel costs. Their stocks were mostly higher. United Continental Holdings Inc. gained 4 percent and JetBlue Airways Corp. 2 percent.

The Dow Jones industrial average is down 184 points, or 1.5 percent, at 11,926 in early trading.

The Standard & Poor's 500 index is down 19 points, or 1.5 percent, at 1,267. The Nasdaq is down 37 points, or 1.4 percent, at 2,631.

Among the most active stocks, Bed Bath & Beyond gained 5 percent after the home furnishings retailer posted a 31 percent jump in income. The company also raised its earnings forecast for the rest of the year.

ConAgra Foods Inc. fell 2 percent. The owner of Slim Jim and Hebrew National brands cut its earnings estimate for the current quarter.

All three indexes closed lower Wednesday after Federal Reserve Chairman Ben Bernanke said problems plaguing the economy may last longer than previously thought.

The Fed also lowered its forecast for U.S. economic growth this year. The Fed said it now expects the economy to grow between 2.7 percent and 2.9 percent this year, down from its previous estimate of slightly more than 3 percent.