US stocks slide as investors turn cautious

NEW YORK (AP) – Stocks fell Thursday after early gains from a better report on jobless claims faded. The Dow Jones industrial average closed below 10,000 for the first time since early July.

The Dow fell 74.25, or 0.7 percent, to 9,985.81. The Dow had traded below 10,000 several times this week, but hadn’t closed below that level since July 6.

The Dow lost 74 points, having been up as much as 45 earlier. The market has been trading in a back-and-forth pattern in recent weeks as many investors remain unconvinced that the economic recovery will hold.

Stocks have been on a generally declining trend in August after charging ahead in July. A bevy of poor indicators on the economy, especially home sales, pierced an optimistic mood brought on by strong earnings reports the month before. The Dow has lost ground in five of the past six trading sessions, and has shed 430 points over that time.

The market enjoyed a brief reprieve from its malaise early Thursday from an encouraging sign on the job market. The Labor Department reported that first-time claims for jobless benefits fell last week after three straight weekly increases.

Now, it’s up to Ben Bernanke to provide the next clues on the economy. The Federal Reserve chairman is delivering a speech early Friday that investors hope will shed light on how weak the U.S. economy really is and whether the Fed may take more steps to revive it.

Peter Cardillo, chief market economist at Avalon Partners Inc., said the market wants to see whether “the pulse of the Fed is beating at a fast rate with anxiety over the economy.”

Broader market barometers also fell. The Standard & Poor’s 500 fell 8.11, or 0.8 percent, to 1,047.22, while the Nasdaq fell 22.85, or 1.1 percent, to 2,118.69.

Falling stocks outpaced rising ones two-to-one on the New York Stock Exchange, where volume came to one billion shares.

First-time claims for unemployment benefits dropped to 473,000 last week, a bigger drop than analysts expected.