NEW YORK — Wall Street tumbled Thursday as further troubles in the financial sector, higher unemployment and lackluster retail sales touched off fresh concerns about the economy.
The Dow Jones industrials skidded nearly 225 points, while bond prices shot higher as investors once again sought the safety of government debt.
The pullback erased much of the 370-point gain the Dow logged the two previous sessions and shows the lack of solid conviction behind many of investors’ recent bets.
Heading the list of worries, insurer American International Group reported a loss of more than $5 billion for the second quarter and the Labor Department said the number of newly laid-off people seeking jobless benefits last week jumped to its highest level in more than six years. Weak sales reports from Wal-Mart Stores and other retailers added to investors’ unease.
Meanwhile, an announcement by the credit-rating agency Moody’s Investors Service that it placed the long-term ratings of credit-card lender American Express on review for possible downgrade exacerbated nervousness.
Bill Stone, chief investment strategist for PNC Wealth Management, said economic news has been somewhat negative lately, often short-circuiting the market’s attempts to build on rallies. Thursday’s reports on employment and financials only added to the uneasiness, he said.
“The concerns about a weakening economy always run to worries about the financials, and then you add some negative news to them on their own, and you’ve got what we’ve got today,” he said.
The Dow fell 224.64, or 1.93 percent, to 11,431.43. It was the Dow’s sixth triple-digit move in the past two weeks.
The Standard & Poor’s 500 index fell 23.12, or 1.79 percent, to 1,266.07, and the Nasdaq composite index fell 22.64, or 0.95 percent, to 2,355.73.
Oil prices that fell sharply earlier in the week rebounded Thursday. Light, sweet crude rose $1.44 to settle at $120.02 on the New York Mercantile Exchange.
