Overnight Markets: US stocks end lower on dreary jobs data

US stocks fell on Thursday, pushing the Standard & Poor's 500 Index below the key 1,130 level, in response to a worsening profit outlook for banks and an unexpected increase in initial jobless claims.

The Dow Jones industrial average ended down 77 points, or 0.72%, at 10,662. The S&P 500 finished down nine points, or 0.83%, at 1,125. The Nasdaq Composite Index declined seven points, or 0.32%, at 2,327.

The market got off to a bad start after initial claims for unemployment benefits rose unexpectedly by 12,000 to a seasonally adjusted 465,000, compared with a consensus forecast for claims to remain steady at 450,000.

A lower reading on business activity in the eurozone and news that Ireland’s economy shrank 1.2% in the second quarter added to the poor investor sentiment.

Stocks erased some of their losses after it was announced that sales of existing homes increased by 7.6%, just above analyst estimates. However, DR Horton fell 2.5% and Toll Brothers lost 1.6%.

Financials took a hit after Bank of America slashed its profit projections for banks. Goldman Sachs lost 2.1%, with Citigroup falling 2.1% and JPMorgan Chase declining 2.1%.

In other company news, Textron fell 2.8% and aircraft manufacturer Boeing lost 2%. The world’s biggest provider of Linux programmes, Red Hat, jumped 9% after sales of its software soared.

In current trading, Asian markets were trading lower on Friday after a dismal US jobless data damped the outlook for global economic growth.

The MSCI Asia Pacific Index declined 0.7% to 125 as of 9:49 a.m. in Tokyo, paring its advance this week to 0.4%. Japan’s Nikkei 225 Stock Average plunged 1.2%, while Australia’s S&P/ASX 200 Index fell 0.9%. South Korea’s Kospi index was treading 0.1% higher at 1,834. Chinese markets are closed for a holiday today.