Dow ends below 10,000 on economic worries

By Leah Schnurr

NEW YORK (BestGrowthStock) – The Dow closed below 10,000 on Thursday a day ahead of an expected downward revision in U.S. second-quarter economic growth and a major speech by Federal Reserve Chairman Ben Bernanke.

Major technology shares were among the biggest losers, with the Nasdaq falling more than the Dow and S&P 500. Tech shares have been seen as a proxy for economic growth. Cisco Systems (CSCO.O: ) fell 2.4 percent to $20.70, while Intel (INTC.O: ) gave up 1.6 percent at $18.18.

Stocks initially rose on data showing first-time claims for jobless benefits fell more than expected last week, but the number was still too high to signal a shift in the weak labor market. The four-week average of new claims, regarded as a better gauge of trends, rose to the highest since late November.

“The best the bull can say is that the recovery is evening itself out now, it’s not accelerating any more,” said Linda Duessel, market strategist at Federated Investors in Pittsburgh.

“We think it’s a soft patch and not a double dip, but the market is pricing more and more for a double dip, so you’re vulnerable to the upside.”

The Dow Jones industrial average (.DJI: ) fell 74.25 points, or 0.74 percent, to 9,985.81. The Standard & Poor’s 500 Index (.SPX: ) shed 8.11 points, or 0.77 percent, to 1,047.22. The Nasdaq Composite Index (.IXIC: ) lost 22.85 points, or 1.07 percent, to 2,118.69.

It was the first time the Dow has closed below the psychologically important 10,000 level since July 6. The market then began a rebound and logged seven straight days of gains.

In his speech on Friday Bernanke is likely to discuss the uncertain prospects for the economy but isn’t expected to give many clues about whether the U.S. central bank will pump more cash into the economy to keep the recovery going.

Bernanke and central bankers from around the world are gathering for their annual meeting in Jackson Hole, Wyoming, with the agenda expected to include a discussion of printing yet more money to spur growth.

After a recent spate of poor economic numbers, there were jitters the GDP data could show the economy is weaker than originally thought. The government’s preliminary reading is expected to come in at 1.4 percent, down from 2.4 percent estimated a month ago. Estimates range broadly from 0.9 percent to 2.2 percent, according to a Reuters poll. (ECI/US: )

On the technical picture, investors were still looking for the 1,040 level on the S&P to act as support. Some consider a dip below that level to be a buying opportunity, as was seen on Wednesday when the index briefly fell below it.

In deal news, Dell Inc (DELL.O: ) raised its bid for data storage company 3PAR Inc (PAR.N: ) to $1.6 billion (HPQ.N: ).

But Hewlett-Packard Co (HPQ.N: ) came back with a revised offer of $1.8 billion after the closing bell, sending 3PAR’s shares up 7.2 percent to $27.90 in extended-hours trading. Shares of 3PAR closed at $26.76. HP closed down 0.1 percent at $38.22, while Dell ended down 0.3 percent to $11.75.

In after-hours trade, Dell lost 0.9 percent to $11.65 and HP slipped 0.4 percent to $38.05.

A drop in shares of coal companies weighed on the energy sector for a second day as the price of natural gas fell, raising concerns that power plants would switch to gas from coal. Massey Energy (MEE.N: ) fell 4.2 percent to $27.93, while the S&P energy sector (.GSPE: ) fell 1 percent.

About 7 billion shares traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq, well below last year’s estimated daily average of 9.65 billion.

Declining stocks outnumbered advancing ones on the NYSE by 1,928 to 1,064, while on the Nasdaq, decliners beat advancers 1,770 to 861.

(Reporting by Leah Schnurr; Editing by Kenneth Barry)

Dow ends below 10,000 on economic worries