Stocks retreated Thursday after government reports showed an increase in unemployment benefit applications last week. Investors didn’t buy into a marginally positive housing report for July as stocks edged down.
The Dow Jones industrial average, the Standard & Poor's 500 index and the Nasdaq composite index all sank 0.5% lower in lunchtime trading, according to a USA Today report.
The Labor Department reported a small bump of 4,000 unemployment claims. However, given the state of the economy, it would take weeks of large gains to see improvement in the national unemployment rate.
Last week’s report delivered a seasonally adjusted 372,000 unemployment applicants. Today’s report is the second straight week of unemployment increases after a string of bad jobs reports. The only silver lining in unemployment rates is that applications remain lower than they were five weeks ago.
The data suggests the job market's “recovery” remains weak and unpredictable just weeks before the national elections.
European markets could not hold onto early gains after initially climbing. The declines coincided with Greece continuing its campaign for more time to work on its debt crisis as reports suggest the eurozone is now in the grip of recession.
Britain's FTSE 100 ended the day up 0.4% to 5,776.60. Germany's DAX closed down 1% to 6,949.57 while France's CAC 40 finished the session down 0.8% to 3,432.56.
Meanwhile, manufacturing activity in China, the world's second-largest economy, sank the lowest in nine months in August, which may cause Beijing to do more to perk up its economy.
The shrinking solar industry in China has cooled due to overproduction pending tariffs in the U.S. and Europe.
Investors flocked to Asian markets Thursday on hopes Beijing will enact new stimulus measures. Hong Kong's Hang Seng index led gains with a 1.2% rise to 20,132.24 for the day, while mainland China's Shanghai Composite Index added 0.3% to 2,113.07 and Japan's Nikkei 225 index ended up 0.5% to 9,178.12.