Wall Street spent another session buffeted by volatility Thursday, this time closing mixed after investors wrestled with their fears about the economy but also looked for bargains after two days of selling. While the Dow Jones industrials and Standard & Poor's 500 index rose sharply, a downdraft in tech stocks left the Nasdaq composite index with a loss.
Buying came in spurts and then tended to quickly evaporate as investors fretted that the economy is either in a recession or headed for one. They showed little confidence, gravitating toward big-name stocks seen as safer bets after a two-day selloff sliced nearly 750 points from the Dow. "I think that people feel that it's got to stop sliding someplace, and they're looking, basically, for bargains," said Scott Fullman, director of derivatives investment strategy for WJB Capital Group in New York.
A snapshot of the labor market highlighted one of investors' worries about the fragility of the economy. The Labor Department reported Thursday that new applications for unemployment benefits rose 15,000 last week to a seasonally adjusted 478,000. That was slightly above analysts' estimates of 470,000. Jobless claims above 400,000 are considered a sign of recession. Investors viewed the data as more evidence that the financial crisis is battering the economy and forcing companies to cut back.
Thomas J. Lee, U.S. equities strategist at JPMorgan Chase & Co. in New York, cautioned that Wall Street will need to rein in its sharp swings before some investors will feel confident enough to return.
"I don't think anyone can buy and sell stocks right now with conviction," he said.