By JOE BEL BRUNO
NEW YORK — Wall Street extended its sharp declines into a fourth day Thursday, with the Dow Jones industrials briefly dropping below 8,000 as investors continued their selling amidst a stream of negative economic news.
The market met with more disappointing data early in the day. The Labor Department reported that the number of newly laid-off individuals seeking unemployment benefits jumped last week to a level not seen since just after the Sept. 11, 2001, terrorist attacks.
And there were more signs of a severe pullback in consumer spending that pummeled stocks earlier in the week. Wal-Mart Stores Inc. trimmed expectations for full-year earnings. And Intel Corp. late Wednesday cut more than $1 billion from its sales forecast, providing more evidence that few industries are safe from a clampdown on spending by businesses as well as consumers.
The market had fluctuated in a narrow range until early in the afternoon when sellers returned.
"There are a host of things that have us nervous, and I think what you're seeing is liquidation selling," said Arthur Hogan, chief market analyst at Jefferies & Co. "I think we're seeing a market pricing in bad news on a daily basis and in a rapid fashion. The market can change its mind quickly as to how much bad news has been priced."
Others described the market's moves as technical in nature.
Ryan Larson, senior equity trader at Voyageur Asset Management, said that in the absence of good news to take stocks higher, traders were retesting the lows made Oct. 10 — an action that most market analysts had predicted would happen sooner or later. The S&P; 500 index fell below its lows by early afternoon trading.
If the index can't rebound above those levels, "it's not going to be good for this market," Larson said. "We rally on hopes, we sell-off on fear, and fear is the dominating factor on the Street."
After the week's litany of bad news, which also included disappointing reports from Macy's Inc. and Starbucks Corp., investors were trying to come to terms with the fact that the economy is in for a protracted downturn.
In early afternoon trading, the Dow fell 226.60, or 2.74 percent, to 8,056.06 after falling to 7,965.42.
The Standard & Poor's 500 index fell 22.04, or 2.59 percent, to 830.26, after dropping to 818.69, well below its intraday low of 839.80 on Oct. 10.
The Nasdaq composite index shed 49.58, or 3.31 percent, to 1,449.63.
