Wall Street tumbles on economy worries

NEW YORK, Jan. 29 (Chinese media) -- Wall Street tumbled on Thursday as a series of economic data and earnings reports suggested the economic conditions are deteriorating.

The U.S. Labor Department reported that the number of continuing unemployment benefit claims increased 159,000 to 4.78 million during the week ending Jan. 17, the highest on records since 1967 and much worse than economists' expectations of 4.65 million.

Meanwhile, the number of initial jobless benefit claims in the week ending Jan. 24 was only 1,000 lower than the 26-year high of 589,000 reached in late December.

The U.S. Commerce Department said on Thursday that new orders for durable goods dropped by 2.6 percent last month, worse than the 2 percent decline economists expected.

A separate report from the Commerce Department showed that new home sales fell 14.7 percent in December to a seasonally adjusted annual rate of 331,000, from a downwardly revised November figure of 388,000. It was the lowest on records dating back to 1963.

Earnings reports added to the recession worries. Ford Motor Co. posted a fourth-quarter loss of 5.9 billion U.S. dollars. Ford announced its decision to cut about 20 percent of the workforce in its credit unit, which means 1,200 jobs.

Eastman Kodak Co. also decided to slash 3,500 to 4,500 jobs, or14 to 18 percent of its workforce, as its quarterly loss topped 137 million dollars due to slumping sales of photography products.

Shares of financial companies declined sharply after Wednesday's rally on "bad bank" proposal.

The Dow Jones industrial average fell 226.44 points, or 2.70 percent, to 8,147.97. The Standard Poor's 500 Index lost 28.95 points, or 3.31 percent, to 845.14. The Nasdaq Composite Index slid 50.50 points, or 3.24 percent, to 1,507.84.