U.S. Data Disappoints Too

U.S. stocks opened sharply lower after disappointing U.S. economic news compounded the market's worries about trade in China, European sovereign debt and continued unrest in the Middle East and North Africa.
The Dow Jones Industrial Average sank 182 points, or 1.5%, to 12030, led lower by Chevron, off 3%, and Exxon Mobil, down 2.6%, which sank in response to a drop in the price of oil. The Standard & Poor's 500-stock index shed 19 points, or 1.4%, to 1301 as its energy, industrial and materials components slumped. The Nasdaq Composite fell 47 points, or 1.7%, to 2706.
Initial claims for U.S. unemployment benefits rose by 26,000 to 397,000 in the week ended March 5, the Labor Department said in a weekly report. The prior week's figures, showing claims fell to the lowest level in almost three years, were revised up slightly, to 371,000 from an original estimate of 368,000.
Economists surveyed by Dow Jones Newswires had forecast claims would rise by only 7,000 in the week ending March 5. The results pressured investor sentiment.
Investors spent much of the morning eyeing overseas developments. Besides continued unrest in Libya and the Middle East, a downgrade of Spain's credit rating and a slowdown in Chinese exports sent global markets lower.
"The market is in a tug of war right now between the recovery and evidence that the economy is slowing, and frankly, [is] dependent on quantitative easing," said Terry L. Morris, senior vice president at National Penn Investors Trust Company.
In separate U.S. data, the U.S. deficit in international trade of goods and services jumped 15.1% to $46.34 billion from a downwardly revised $40.26 billion the month before, the Commerce Department said. The December trade gap was originally reported as $40.58 billion.
The January deficit was the largest in seven months and much bigger than expected, with oil prices playing a key role. Economists surveyed by Dow Jones Newswires had estimated a $41.5 billion shortfall.
European stocks and the euro were each lower after Moody's Investor Services Inc. downgraded its rating on Spanish government debt, a move that throws the euro zone's debt issues back into the limelight. The downgrade comes on the eve of a European Union summit in Brussels scheduled for Friday.
Also helping set the bearish tone, China said that its monthly exports in February grew only 2.4% from the year-earlier period, while imports rose 19.4%. The growth represented a sharp slowdown from January, pushing China's trade balance to a deficit of $7.3 billion in February. Asian stocks finished sharply lower following the Chinese data; the Shanghai Composite index closed down 1.5%.