Sears, Roebuck said its lackluster sales would cause it to miss first-quarter earnings projections. The Commerce Department also issued retail sales figures for March that were weaker than expected. And the Labor Department reported that the number of Americans filing new claims for state unemployment insurance last week climbed to its highest level in five years, further evidence of the weakening labor market. The unemployment numbers troubled investors, analysts said. What really drives consumer spending is the labor market, said James W. Coons, chief economist at Huntington National Bank.
People are concerned about losing their jobs.
That's why the initial job claims carry so much weight. It caps a very disturbing trend that's been in place since last summer. Technology stocks stumbled amid earnings concerns. On Wednesday, the Internet portal beat Wall Street's sharply reduced first-quarter earnings forecasts, but also said it is cutting its work force by 12 percent. A downgrade by J.P. Morgan of several communication chip stocks added the ongoing pressure on the technology sector.