Hopes that the economy was going to rebound from its long slump and from the credit crisis were shattered Thursday by negative retailer reports and concerns about Friday's jobs report. The Dow fell over 340 pounds as investors sold on the negative news. It looks like the bears have returned until we can get some good news again.
The market was already nervous as it waited for the government to release its August employment report on Friday. So news from the nation's major retailers that shoppers curtailed their spending last month due to higher gas and food prices came as a heavy blow.
Wal-Mart Stores Inc., the world's largest retailer, beat expectations because of its big discounts, but many teen retailers and luxury chains did poorly, a sign that consumers are spending mostly on essentials and putting discretionary buying on hold.
Meanwhile, the Labor Department said new applications for unemployment insurance rose by 15,000 last week from the previous week. That broadly missed expectations for a fourth-straight week of declines, heightening worries that the average American -- already feeling the effects of the weak housing market -- will have even less means to spend.
