Weak job market takes stocks down

First Posted:

The Associated Press

NEW YORK — Stocks began the fourth quarter with their worst drop in three months after reports on the job market and manufacturing reawakened investors’ pessimism about the economy.
The Dow Jones industrial average tumbled 203 points Thursday, while all the major indexes fell between 2 percent and 3 percent. The slide intensified in the final minutes of the day, signaling that traders were growing nervous ahead of the government’s key September jobs report due before the opening bell Friday.
Bond prices jumped as investors sought a safer place for their money.
It was the sixth drop in seven days for stocks and another reminder of how fragile the market’s seven-month rally has become. The economic reports overshadowed a more upbeat assessment on housing and added urgency to questions about how strong the recovery really is.
“Fear is still very, very fresh in people’s minds and the magnitude of the potential disaster that we had last September through March, I think still has investors pretty skittish,” said Darell Krasnoff, managing director of Bel Air Investment Advisors in Los Angeles. “So our sense is that some bad news can shift sentiment pretty quickly.”
The latest worries erupted when the Labor Department said new claims for jobless benefits rose last week to 551,000.
Economists had expecting claims would be essentially unchanged at 535,000, according to a survey by Thomson Reuters.