Stocks slumped Thursday after comments from Fed chair Ben Bernanke on the banking sector and weak reports on economic growth and the jobs market revived worries about a recession.
The Dow Jones industrial average (INDU) lost 0.9%, while the broader Standard & Poor's 500 (SPX) index fell 0.9%. The Nasdaq composite (COMP) declined 0.9%.
GDP. A revised reading of gross domestic product, the broadest measure of the nation's economic activity, showed fourth-quarter growth remained at the same tepid 0.6% rate initially reported. Economists surveyed by Briefing.com thought growth would be revised up to 0.8% in the quarter.
Jobless claims. Separately, the number of Americans filing new claims for unemployment rose unexpectedly to 373,000 last week from a revised 354,000 in the previous week. Economists expected 350,000 new claims.
Financials fall. The financial sector led the stock downturn after weak earnings from mortgage lender Freddie Mac and comments from Bernanke that while large U.S. banks will likely recover from the recent credit crisis, smaller, regional ones could fail.
Chairman of the Fed, Ben Bernanke made comments on the banking sector, and these comments alon with bad GDP, the decreasing value of the dollar, and the increasing of oil and gold prices, have caused stocks to slump and the fear of an oncoming recession to increase. The Dow Jones, S&P 500, and NASDAQ all declined .9% and according to Bernanke, these problems are not going to go away any time soon.
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