(RTTNews) – Stocks have moved sharply lower over the course of morning trading on Thursday, as investors react negatively to some mixed economic news and disappointing corporate news. The losses extend a recent downward move by the markets, with the Dow moving lower for the seventh consecutive session.

On the economic front, a report from the Labor Department showed that initial jobless claims rose to 524,000 in the week ended January 10th from the previous week’s revised figure of 470,000. The increases exceeded the estimate of economists, who had expected claims to rise to 501,000.

At the same time, the report also showed that the less volatile four-week moving average fell to 518,500 from the previous week’s revised average of 526,500. Continuing claims also showed a notable decrease, falling to 4.497 million in the week ended January 3rd.

Separately, the Labor Department said its producer price index fell 1.9 percent in December following an unrevised 2.2 percent decrease in the previous month. The decrease by the index came in line with economists’ expectations.

Excluding food and energy prices, the core producer price index edged up 0.2 percent in December after rising 0.1 percent in November. Economists had been expecting core prices to show another 0.1 percent increase.

Additionally, the Empire State Manufacturing Index came in better than expected, narrowing to a reading of negative 22.2 compared to economist estimates of a reading of negative 25.0. Similarly, the Philadelphia Fed Manufacturing index came in at negative 24.3, substantially better than the reading of negative 35.0 that was expected.

In corporate news, the Wall Street Journal reported that the U.S. government is close to finalizing a deal to provide billions in additional aid to Bank of America (BAC) to help it complete its acquisition of Merrill Lynch. The bank, which has already received $25 billion from the government’s $700 financial rescue funds, acquired Merrill Lynch on January 1.

The report noted that discussions between the bank and the government over the additional funds began in mid-December, when Bank of America said that it was unlikely to complete its January 1 purchase, because of the larger-than-expected fourth-quarter losses in the Merrill Lynch.

Meanwhile, Apple Inc. (AAPL) is generating some selling pressure, with investors responding to an announcement that its CEO, Steve Jobs had decided go on medical leave until the end of June. In an email sent to all Apple employees, Jobs announced that Tim Cook would be responsible for Apple’s day-to-day operations during his absence.

Some negative sentiment has also been generated by news that Motorola (MOT) plans to eliminate 4,000 more jobs, mostly in its mobile devices business. Google (GOOG) also revealed that it intends to eliminate about 100 recruitment jobs.

In recent trading, the major averages have pulled back to new lows for the session and are currently posting steep losses. The Dow is currently down 169.25 at 8,030.89, the Nasdaq is down 30.90 at 1,458.74 and the S&P 500 is down 19.03 at 823.59.

Sector News

With the disappointing news from Bank of America, the stock is down 24.5 percent on the day and has negatively influenced many other financial stocks. With the widespread weakness, financials, particularly banks, are turning in some of the worst performances of the day.

With a decline of 10.4 percent, the Dow Jones Banks Index has fallen to a level that, if closed at, would mark its lowest closing level in over nine years.

Additionally, as the confidence in the broader markets continues to wane, real estate stocks are under considerable pressure. With General Growth Properties (GGP) and SL Green Realty (SLG) helping to lead the way lower, the Morgan Stanley REIT Index is down 4.4 percent.

Likewise, brokerage, steel, and housing stocks are also suffering notable losses. The Amex Securities Broker/Dealer Index is down 4.9 percent, while the Amex Steel Index and the Philadelphia Housing Sector Index are down 4.6 percent and 4.3 percent, respectively.

At the other end of the spectrum, tobacco stocks are some of the only advancing stocks of the day, strong gains by Alliance One International (AOI) and Altria (MO) contributing to a 0.7 percent gain by the Amex Tobacco.

Stock Driven By Analyst Comments

Force Protection (FRPT) is currently down 19.4 percent after being downgraded to Hold from Buy at Collins Stewart. With the decline, the stock has fallen from a recent one-year closing high to hit its lowest level since the second half of December.

Atlas Pipeline (APL) is also suffering from a downgrade, posting a loss of 8.7 percent after being cut to Market Perform from Outperform at Wachovia.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region fell considerably following the sell-off seen on Wall Street overnight. Japan’s Nikkei 225 Index showed a notable decline, closing with a loss of nearly 5 percent.

The major European averages are also showing significant weakness, falling to new lows for the day. While the French CAC 40 Index and the German DAX Index are down 2.6 percent and 2.5 percent, respectively, the U.K. FTSE 100 Index is posting a 1.8 percent loss.

In the bond market, treasuries are extending a recent upward move amid the weakness among stocks. Subsequently, the yield on the benchmark 10-year note is currently down 3.1 basis points at 2.182 percent.

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Copyright(c) 2009 RealTimeTraders.com, Inc. All Rights Reserved

Article also found at INO.com

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Every success in trading in 2009,

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President, INO.com
Co-creator, MarketClub