World markets were mostly lower amid further evidence of economic hardship in the United States and a slowing global economy. From Washington, VOA's Michael Bowman reports.
The number of Americans looking for work continues to rise, as the U.S. Labor Department reports new claims for unemployment benefits have hit a 16-year high.
There were 542,000 unemployment claims filed last week, bringing the four-week average to just over half a million - the highest figure in more than 25 years. Any weekly number above 400,000 is considered an indication of hardship in the U.S. labor market.
"What it [the new claims number] tells us, is the job market is just getting worse and worse," said Stuart Hoffman, chief economist for PNC Financial Services. "And it is affecting more and more people in different industries and different parts of this country."
The worsening jobs situation has not gone unnoticed at the White House. Spokeswoman Dana Perino says President Bush supports congressional action to extend the duration of unemployment benefits.
"The recent financial and credit crisis has slowed our economy dramatically," she said. "It is having an impact on job creation. And because of the tight job market, the president believes it would be appropriate to further extend unemployment benefits. And he would sign legislation that is now in front of Congress."
The Bush administration wants Congress to act on a benefits extension before the upcoming holiday recess.
If there has been a bright spot for consumers in recent weeks, it is the precipitous plunge in oil prices. Oil traded below $50 a barrel, down from nearly $150 a barrel just a few months ago. With cash-strapped consumers spending less on fossil fuels, they have more disposable income to pay for other necessities.
But economists say falling energy prices are a mixed blessing, since they reflect lower demand caused to a large degree by a dramatically slowing global economy.
"We have seen the demand for oil change in a way that we have not seen since probably the oil shocks of the 1970s. Right now oil is getting pounded because the stock market looks terrible and all the economic news is bad," said energy analyst Phil Flynn.
Flynn says he would not be surprised if oil drops to the $35 a barrel range in coming weeks.
Major markets in Asia and Europe all closed lower. In Tokyo, shares plunged nearly seven percent, and in London, stocks fell more than three percent. Wednesday, New York's Dow Jones Industrial Average closed at its lowest level in five years.
No one knows just how low the market will go, according to economist Peter Cardillo of the New York-based investment group Avalon Partners.
"The market is gripped with fear, and of course the big fear is: how long will the recession last? There is just a lot of negative sentiment out there. This market has had a major decline, and somewhere along the line it will begin to stabilize," he said.
Meanwhile, a private American research firm, the Conference Board, says its index of leading economic indicators fell 0.8 percent last month. In recent months the index, seen as a reliable predictor of future economic performance, has declined at its fastest rate since 2001.