- The Washington Times - Thursday, May 21, 2009


Wall Street closed with losses Thursday following a government report that continuing unemployment claims reached a 16-week high.

The Dow Jones Industrial Average closed at 8,292.13, down 129.91 points. The broader Standard & Poor’s 500-stocks Index closed at 888.33, down 15.14 points, and the tech-heavy NASDAQ closed at 1,695.25, down 32.59 points.

The Labor Department said Thursday the number of first-time unemployment claims decreased last week by 12,000. Unemployed workers filed 631,000 claims in the week ending May 16, compared with the previous week’s revised figure of 643,000.

However, the number of continuing claims increased last week to 6.66 million — a record for the 16th straight week, which set off another round of concerns about the economy not recovering as fast as anticipated.

The numbers, which were near analysts’ predictions, are watched closely because they are connected to less consumer spending and the potential for more loans and credit not being repaid.

“The markets have come a long way, but today was a great indication of how vulnerable they still are,” said Brian Lipps, a Charles Schwab & Co. vice president. “The markets have priced in some rosy expectations, and any contradiction comes at an expense.”

The markets are up more than 30 percent since hitting a 12-year low in early March.

Now that most of the major U.S. banks appear to be stable and are raising capital to repay bailout loans and cushion against a prolonged recession, investors are expanding their focus to the global economy and the country’s struggling housing industry.

Standard & Poor’s reportedly is considering a rate cut for Britain because of increasing debt, which will result in higher borrowing costs for the county.

And reports over the past weeks show U.S. housing construction is at a 50-year low as home prices continue to drop.

Still, among the most heavily traded stocks Thursday were Bank of America and Regions Financial Corp., two of 10 major U.S. banks told by the federal government in its so-called “stress tests” they needed to raise more capital.

Bank of America has raised $13.47 billion through a stock offering since the stress test results were released May 7.

Bank of America stock closed at $11.41, down 8 cents a share.

Regions intends to offer $1 billion of common shares and $250 million of new preferred shares to raise the capital.

Regions stock closed at $4.10, down 79 cents a share.

Light, sweet crude oil fell 99 cents, to $61.05 a barrel, on the New York Mercantile Exchange after reaching a six-month high Wednesday.

Overseas, Japan’s Nikkei stock was down 0.86 percent. In afternoon trading, Britain’s FTSE 100 fell 2.68 percent, Germany’s DAX index fell 2.74 percent, and France’s CAC-40 fell 2.60 percent.

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