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Omaha Steve Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Oct-02-08 10:28 AM
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Stocks decline on unemployment, factory reports

Oct 2, 11:04 AM (ET)


NEW YORK (AP) - Stocks tumbled and credit markets remained tight Thursday after an unexpected rise in unemployment claims and a drop in factory orders underscored the troubles facing the economy even if lawmakers are able to pass a financial rescue aimed at resuscitating the ailing credit markets.

A man protesting the proposed Congressional bailout, holds an altered American flag on Wall St. Thursday, Oct. 2, 2008 in New York. World stock markets were mixed Thursday as broader concerns about a global slowdown dampened relief over the U.S. Senate's passage of the $700 billion bank rescue package. (AP Photo/Mark Lennihan)

The Dow Jones industrials fell by more than 200 points, their fourth straight triple-digit move, after the government reported that the number of people seeking unemployment benefits rose last week to a seven-year high and that demand at the nation's factories has fallen by the largest amount in nearly two years.

The market is interpreting the Commerce Department report on factories as a sign that tight credit conditions are hitting manufacturers.

The readings came as Wall Street tried to determine what might come of the government's rescue package, which is supported by President Bush and leaders of both parties. A House vote could come as soon as Friday. A version of the bill that the Senate passed in a 74-25 vote late Wednesday added $100 billion in tax breaks for businesses and the middle class. It also raised the limit on federal deposit insurance to $250,000 from $100,000.

Supporters are hoping the sweetened bill will be more palatable to some of the 133 House Republicans who rejected the measure in a vote Monday that took Wall Street, and many on Capitol Hill, by surprise.

Those in favor of the plan to let the government buy billions of dollars in bad mortgage debt and other now-toxic assets say it will help unclog the world's ailing credit markets. Banks are fearful of making loans, even to each other, because of worries they won't be repaid. That, in turn, is weighing on the economy, making borrowing more difficult and expensive for businesses and consumers alike.

FULL story at link.

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