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Stocks fluctuate as economic worries dog investors

(Agencies)
Updated: 2008-10-09 23:56

Britain rolled out a similar plan, though no UK bank has received any investments. In Iceland, the government now has control of all three of the country's major banks as it struggles to contain the troubles there.

Wall Street also gained some confidence after the government reported applications for unemployment benefits dropped last week from a seven-year high. The Labor Department's report matched projections, though claims still remain at elevated levels.

In midmorning trading, the Dow Jones industrial average fell 69.85, or 0.75 percent, to 9,188.25. GM was the biggest decliner in the Dow, falling $1.24, or 18 percent, to $5.67.

Broader stock indicators were mixed. The Standard & Poor's 500 index slipped 4.19, or 0.43 percent, to 980.75, and the Nasdaq composite index rose 9.83, or 0.56 percent, to 1,750.16.

Demand for short-term Treasurys waned, with the yield on the three-month Treasury bill, which moves opposite its price, rising to 0.77 percent from 0.63 percent late Wednesday. Longer-term debt prices also fell, with the yield on the 10-year note rising to 3.76 percent from 3.65 percent late Wednesday.

Investors will also be watching to see what effect short selling will have on the market now that a three-week ban imposed by regulators has expired. Some analysts believe the unprecedented ban on short selling - an effort to bolster investor confidence amid the worst financial crisis since the stock market crash of 1929 - did more harm than good at a time of historic market volatility.

Meanwhile, oil prices looked for direction as traders weighed fears that a world recession will crimp demand against speculation that OPEC may cut output to keep prices from falling too far. Light, sweet crude rose 14 cents to $89.09 per barrel on the New York Mercantile Exchange.

Declining issues outnumbered advancers by about 3 to 1 on the New York Stock Exchange, where volume came to 386.7 million shares.

The Russell 2000 index of smaller companies fell 6.77, or 1.24 percent, to 539.80.

In Asia, Japan's Nikkei 225 closed down 0.50 percent while the Hang Seng added 3.31 percent. In afternoon trading, European bourses advanced, with Britain's FTSE-100 up 1.65 percent, Germany's DAX up 0.86 percent, and France's CAC-40 up 0.34 percent.

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