Rising dollar brings stock market down

NEW YORK | A rising dollar and disappointing corporate news pushed stocks lower and Treasury bonds higher Thursday on concerns the economy will struggle to recover.

Major stock indexes slid 1 percent, including the Dow Jones Industrial Average, which fell 133 points.

The dollar jumped to a three-month high against the euro, a sign of risk-aversion in the market. Investor confidence was further sapped as a forecast from FedEx Corp. fell short of expectations and Citigroup Inc. sold stock at a steep discount as part of a plan to repay government loans.

More poor news came in about the economy as the government reported an unexpected rise in unemployment claims last week. The number of new jobless claims rose to 480,000 last week, up 7,000 from the previous week.

Stocks were coming under pressure from the stronger dollar, which can cut into profits of U.S. companies that do business abroad. The euro slumped after Standard & Poor’s lowered its debt rating on Greece, the latest European country to have credit problems.

A pair of improved economic reports did little to shore up the market. The Conference Board’s index of leading economic indicators rose in November for the eighth consecutive month, while the Philadelphia Federal Reserve said manufacturing in its region rose.

John Merrill, chief investment officer of Tanglewood Wealth Management in Houston, said the rising dollar was overshadowing the improvement in the leading indicator numbers. He said the dollar was benefiting as traders concerned about rising debt levels in countries like Greece pulled out of the euro.

“There are a lot of shifting sands as people, not just federal reserve banks, look at the underpinnings of those currencies,” he said.

The Dow fell 132.86 to 10,308.26. The broader Standard & Poor’s 500 index fell 13.10 to 1,096.08, and the Nasdaq Composite Index fell 26.89 to 2,180.05. The Russell 2000 index of smaller companies fell 6.96 to 604.25.

Bond prices rose, pushing yields lower. The yield on the benchmark 10-year Treasury note moved from 3.48 percent from 3.60 percent late Wednesday.

The ICE Futures U.S. dollar index, which measures the greenback against a basket of foreign currencies, rose 1 percent.