Stronger dollar, weak economic date sinks stocks

NEW YORK | Signs of a subdued economic recovery sent investors out of stocks Thursday and in search of safer assets like the dollar.

Major indexes tumbled about 1 percent, including the Dow Jones Industrial Average, which lost 94 points but ended well off its low. Energy and material stocks logged the biggest losses as a jump in the dollar sent commodity prices tumbling. Meanwhile, an analyst’s downgrade of the chip industry pulled technology shares sharply lower.

As stocks fell, investors flocked to the dollar and Treasuries. The yield on the three-month T-bill, considered one of the safest investments, tumbled to its lowest level since December. The Chicago Board Options Exchange’s Volatility Index, also known as Wall Street’s fear gauge, rose more than 4 percent.

The Dow fell 93.87, or 0.9 percent, to 10,332.44. The Standard & Poor’s 500 Index fell 14.90, or 1.3 percent, to 1,094.90, while the Nasdaq Composite Index fell 36.32, or 1.7 percent, to 2,156.82.

Bonds rallied as stocks fell. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.35 percent from 3.37 percent late Wednesday. The yield on the three-month T-bill was holding steady at 0.02 percent, after earlier falling to as low as 0.005 percent.

Among the day’s economic news, the Mortgage Bankers Association said more than 14 percent of American homeowners with a mortgage were either behind on their payments or in foreclosure at the end of September. Investors are worried that loan defaults could continue to rise as long as unemployment keeps rising.

And, a gauge of future economic activity and a report on unemployment benefits signaled Thursday that the recovery likely will remain weak in the coming months.

The Conference Board’s index of leading economic indicators rose less in October than analysts had expected. The index forecasts activity by measuring consumer expectations, building permits and other data.

The government said the number of newly laid-off workers seeking unemployment insurance was unchanged last week at 505,000. The figure remains above the level that would indicate the economy is adding jobs.

Tech shares fell again after chipmakers, including Intel Corp., were downgraded.

Intel fell 4.1 percent, sliding 82 cents to $19.30. Texas Instruments Inc. fell 87 cents, or 3.4 percent, to $24.88, while Advanced Micro Devices Inc. fell 27 cents, or 3.7 percent, to $7.05.

The Russell 2000 Index of smaller companies fell 14.47, or 2.4 percent, to 585.68.