Wall Street Ends on Double-Digit Loses

Stocks bounced back from triple digit lows Thursday but couldn’t break into positive territory.

The Dow Jones industrial average tumbled 52.52 points, or 0.51%, to 10,321.11. The S&P 500 index lost 2.26 points, or 0.20%, ending the day at 1,102.96. The Nasdaq composite shed 1.68 points, or 0.08%, to close at 2,234.22.

1 stock advanced for every 1.1 stocks that declined on the OTCBB. Total trades were valued at $63,812,828 as 1,446,451,897 shares traded hands.

An unexpected rise in first-time claims for unemployment raised concerns that the labor market will worsen while the national unemployment rate continues to hover near 10%. Fears over Greece’s financial troubles are also fanning the flames that threaten to spread across neighboring nations.

European markets fell after the European Commission said economic sentiment in the 16 countries that use the euro worsened unexpectedly in February.

Jobless Claims

Initial jobless claims climbed by 22,000 to a seasonally adjusted 496,000 for the week ending February 20, 2010. The jump in unemployment claims raised the adjusted insured unemployment during the week ending February 13 to 4,617,000.

North Carolina, Pennsylvania and Kentucky saw the steepest job losses, concentrated in the construction, manufacturing, and food industries. The Labor Department’s monthly report on employment will be released next week.

European Concerns

Federal Reserve Chairman Ben Bernanke told lawmakers Thursday the central bank is looking into Goldman Sachs and other Wall Street firms’ use of a sophisticated investment instrument to make bets that Greece will default on its debt. Goldman Sachs helped Greek officials raise $1 billion of off-balance-sheet funding in 2002 through swaps, which European Union regulators said they knew nothing about until recent days.

“Obviously, using these instruments in a way that intentionally destabilizes a company or a country is counterproductive,” Bernanke said, adding that the Securities and Exchange Commission probably will be looking into this matter as well.

Standard & Poor’s said Wednesday that Greece was on the verge of junk status within a month. The downgrade could be made despite the Greek government’s announced efforts to cut its 2010 general government deficit by 4% of GDP to 8.7% by freezing public sector wages and increasing fuel taxes, among other means.

Moody’s said it would keep the rating unchanged if promised spending cuts by the government are enacted. Greece now plans to issue a 10-year bond next week, after the government announces a new austerity package worth between €2 billion and €2.5 billion ($2.70 billion and $3.37 billion).

The threat of a Greek default sent global markets into a tailspin earlier in the month, pushing U.S. stocks to three-month lows and causing the S&P 500 to lose over 9%. European officials said earlier in the month that they were ready to step in and help Greece if need be, but were reluctant to reveal specifics.

Commodities & The Dollar

The dollar dipped against the euro and yen Thursday after making minor gains in the early afternoon. The dollar dipped to 1.3556 against the euro.

Oil prices fell beneath $80 a barrel, falling 1.73 points to $78.27 for April delivery. Gold grew by 11.20 points to $1,108.40 an ounce.