Renewed worries about the health of the job market drove stocks lower on Thursday after the government reported an unexpected jump in unemployment claims.
The Labour Department said that first-time claims for unemployment benefits rose to 474,000 last week, the highest level in eight months. Forecasters didn’t see it coming. Economists had expected claims would drop to 410,000.
Applications for unemployment benefits have increased in three of the previous four weeks.
The Dow Jones industrial average fell 52 points, or 0.4 per cent, to 12,672. The Standard & Poor’s 500 index fell 6 points, or 0.5 per cent, to 1,341. The Nasdaq composite fell 5 points, or 0.2 per cent, to 2,822.
The weekly look at jobless claims raised fresh concerns about what the government’s monthly jobs report for April will reveal on Friday.
Economists forecast that employers added 185,000 workers in April. The unemployment rate is expected to remain unchanged at 8.8 per cent.
Stronger earnings have lifted stocks over recent weeks.
General Motors and Estee Lauder were among the companies reporting rising profits on Thursday. GM said its earnings more than tripled on stronger sales in the U.S. and China. Despite the results, GM fell nearly 3 percent in early trading.
Estee Lauder said earnings doubled on rising sales and deeper cost-cutting. Its stock rose more than 1 per cent.
The grocery chain Whole Foods Market Inc. reported earnings that topped Wall Street’s estimates after the market closed on Wednesday. Higher revenue helped Whole Foods quarterly net income rise 33 per cent. Whole Foods rose 2 per cent in early trading.
A pair of economic reports raised doubts about the economy’s strength and weighed on markets on Wednesday. Payroll processor ADP said companies added fewer jobs in April than economists had expected.
In a separate report, the Institute for Supply Management said its service sector index rose at the slowest pace in 8 months in April.
