Stocks Edge Off Lows But Slide Sharply

Stocks dropped sharply Thursday and never came back up as pessimism surrounding the world economy weighed on markets. Almost no unleveraged or long-biased exchange traded funds finished in the black, though major indexes moved off their lows at the end of the day.

The Dow Jones Industrial Average closed down 93 points at 10334. The Nasdaq was down 36 at 2157 and the S&P 500 slipped 15 to 1095.

Overseas equities were mostly lower, which had a positive impact on the dollar and the opposite effect on gold and oil prices.

As investors questioned whether a recent rally has run out of steam and economic recovery hopes were overblown, the Organization for Economic Cooperation and Development increased its forecast for economic growth in 2010 for its 30 member countries, but cautioned any recovery will be slow and bumpy because of high unemployment. The Paris-based group said unemployment is not expected to peak until the end of 2010 or the beginning of 2011.

Data Thursday showed initial jobless claims were unchanged last week at 505,000.

Technology shares led a decline in markets on Wednesday, as the tech-heavy Nasdaq Composite fell 10 points, the Dow Jones Industrial Average fell 11 points and the S&P 500 retreated a fraction of a point.

Tech stocks came under pressure after Bank of America Merrill Lynch (BAC) downgraded eight microchip companies, notably Intel (INTC) and Texas Instruments (TXI), on worries that inventories are too high.

The dollar rose against most currencies, with the euro trading at a day's low of $1.4842. Gold futures fell $4.70 an ounce and oil futures also lost ground.

A weaker sales forecast from Danone and losses by miners sent the pan-European Dow Jones Stoxx 600 down 0.4% in mid-morning trade. Declines also were seen in many Asian markets, with the Hang Seng retreating 0.9% and the Nikkei 225 also ending lower.

Dow Jones Newswires contributed to this report.