World stocks, oil fall on U.S. jobless, Greece woes

By Luciana Lopez

NEW YORK (BestGrowthStock) – U.S. stocks (Read more about the stock market today. ) fell on Thursday and crude oil prices slid more than 2 percent after weak U.S. jobless and manufacturing data drove fears that the global economic recovery is on shaky ground.

The yen gained against both the dollar and the euro as investors fled to safe-havens, and the euro hit a one-year low against the yen on growing worries about a sovereign debt default in the euro zone.

European stocks also sank, falling after two major ratings agencies suggested they might downgrade the sovereign debt of debt-laden Greece and then extending losses on the disappointing U.S. data.

First-time claims for U.S. unemployment benefits rose last week, defying expectations for a fall, and new orders for long-lasting U.S. manufactured goods in January also disappointed investors.

“Our domestic macro numbers speak of lingering weakness everywhere in the economy,” said Peter Kenny, managing director at Knight Equity Markets in Jersey City, New Jersey. “It’s very difficult to make a compelling argument to buy the market.”

U.S. stocks (Read more about the stock market today. ) in afternoon trade managed to pare steep losses that had driven the Dow industrials down by almost 200 points earlier. The turn in the market, which briefly drove the Nasdaq into positive territory, came amid rumors of a 4-for-1 planned stock split by Apple Inc (Read more about Apple stock future.) (AAPL.O: ). An Apple spokesman said the company has not announced a stock split.

Some analysts said the broader move was the result of an oversold market earlier. Still, all three major indexes closed lower, with industrial and financial shares among the biggest decliners.

The U.S. government reported that durable goods orders, excluding transportation, fell 0.6 percent in January.

The Dow Jones industrial average (.DJI: ) ended down 53.13 points, or 0.51 percent, at 10,321.03. The Standard & Poor’s 500 Index (.SPX: ) was down 2.30 points, or 0.21 percent, at 1,102.94. The Nasdaq Composite Index (.IXIC: ) was down 1.68 points, or 0.08 percent, at 2,234.22.

Apple was among the Nasdaq’s leaders, gaining 0.7 percent to $202.01.

The pan-European FTSEurofirst 300 index of top European shares (.FTEU3: ) finished 1.67 percent lower at 996.73 points, the lowest close since Feb 15.

Moody’s said a change in Greece’s rating would depend on the enactment of fiscal reform plans, and Standard & Poor’s said a downgrade of one or two notches in the next month remains possible.

World stocks measured in the MSCI All-Country World Index (.MIWD00000PUS: ) slid 0.75 percent.

The investor fears boosted the yen as well, with the dollar down 1.25 percent at 89.07 yen.

The euro reversed earlier losses against the dollar to gain 0.13 percent to $1.3547, after hitting an almost nine-month low against the dollar. The euro weakened 1.1 percent to 120.70 yen, after falling as low as 119.66 yen, the lowest point since February 2009.

“The yen has strengthened through Asian and European trading. Sovereign risk fears and the threats of a downgrade of Greece has definitely had an impact,” said Sacha Tihanyi, currency strategist at Scotia Capital in Toronto.

“The initial jobless claims data has really helped to push more of a U.S.-centric feeling of risk aversion,” he added.

U.S. first-time jobless claims in the latest week rose for a second straight week

U.S. Treasuries rose on the flight to safer investments.

The benchmark 10-year U.S. Treasury note was up 14/32, with the yield at 3.6381 percent. The two-year U.S. Treasury note was up 2/32, with the yield at 0.8276 percent. The 30-year U.S. Treasury bond was up 28/32, with the yield at 4.5806 percent.

Borrowing costs for peripheral euro zone countries rose on concerns over Greece, with the 10-year Greek/German bond yield spread widening to as much as 365 basis points from 342 bps on Wednesday.

The equivalent Spanish spread moved out by as much as 5 basis points to 81 basis points as concerns grew that the country might become the next in the euro zone to struggle under the weight of a large budget deficit.

Commodity prices also fell, with oil hit both by fears over the economy and the rise in the dollar against the yen.

“Economic data is testing the optimism of some investors who had hoped that rebounding economic growth would push up demand for commodities,” said Carsten Fritsch, analyst at Commerzbank.

U.S. light sweet crude oil settled down $1.83, or 2.29 percent, to $78.17 per barrel. The Reuters/Jefferies CRB Index (.CRB: ) was down 3.87 points, or 1.41 percent, at 270.87.

In Asia, Japan’s Nikkei average closed down 1 percent.

Stock Investing

(Additional reporting by Wanfeng Zhou, Ellis Mnyandu, Leah Schnurr and Rodrigo Campos in New York and Atul Prakash and William James in London; Editing by Leslie Adler)

World stocks, oil fall on U.S. jobless, Greece woes