WASHINGTON — A fresh wave of bad economic news, including a half-million Americans newly out of work and the weakest October retail sales in nearly 40 years, pummeled the stock market Thursday, driving the Dow Jones industrials under 9,000 again with a stunning two-day decline of 10 percent.
The high market volatility that characterized the financial meltdown in September and October has returned, and the economic picture is growing notably bleaker, with both the holiday shopping season and the new administration of President-elect Obama looming in coming months.
Henry Paulson, President Bush’s treasury secretary, pledged to work closely with Obama for a smooth handoff of power. Paulson said a “methodical and orderly” transition was in the best interests of the financial markets.
Those markets are rattled all over again. The Dow fell 443 points Thursday, on top of a 486-point drop on Wednesday. The 10 percent decline for the average is the worst over any two days since 1987. Thursday’s drop took the Dow to 8,696.
The decline came with a heap of new economic indicators, all of them discouraging:
The Labor Department reported 481,000 new filings for unemployment benefits for last week, slightly lower than the week before but well into recession territory.
The total number of people drawing jobless benefits in late October rose to 3.84 million, worse than analysts had expected and far higher than a year ago. The last time the figure was that high was February 1983, toward the end of a painful recession, although the work force then was only about two-thirds the size it is today. The increase in people on the rolls suggests the out-of-work are having a harder time finding jobs than in previous weeks.
Retail sales for October were the worst in at least 39 years, according to the International Council of Shopping Centers-Goldman Sachs index, suggesting shoppers will be skittish this holiday season.
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