NEW YORK (TheStreet) – Stocks tumbled as rising jobless claims highlighted job market weakness while global debt concerns reignited fears of a tepid recovery.

The Dow Jones Industrial Average plunged211 points, or 2.1%, to 10,059. The S&P 500 lost 26 points, or 2.4%, to 1071 and the Nasdaq was lower by 51 points, or 2.3%, at 2141.
Fears about how struggling Portugal, Spain and several Eastern European countries will cover deficits weighed on global markets, lifting the U.S. dollar, which strengthened against a basket of currencies. The dollar index rose 0.6%.

>>Five Mid-Cap Stocks Ready to Break Out

Overseas, Hong Kong’s Hang Seng was lower by 1.8%, and Japan’s Nikkei was down by 0.5%. The FTSE in London was 2.2% lower, and the DAX in Frankfurt was down 2.5%.

Earlier, the Labor Department said initial jobless claims rose by 8,000 to 480,000 in the final week of January. The market, which views the report with added interest because it comes a day before the government’s nonfarm payrolls report for January, had expected initial claims to drop to 454,000, according to consensus estimates.

Bearish sentiment rose 6.4 percentage points to a three-month high of 43.1%, as measured by a weekly sentiment survey from the American Association of Individual Investors.

Key issues of concern cited by survey respondents included: the pace of the economic recovery, unemployment, the threat of long-term inflation and government policies — no tightening actions by China or sovereign debt problems in Europe, the survey noted.

Charles Rotblut, vice president and AAII journal editor said global concerns largely register as background noise to individual investors.

If you enjoyed this post then Subscribe to Savvy Investor via RSS