Just ahead of the crucial holiday shopping season, most of the nation's retailers reported double-digit declines in October sales on Thursday, helping to send the stock market plunging for the second straight day.
Concerns about widespread economic weakness sent the major stock indexes down more than 4 percent Thursday, including the Dow Jones industrial average, which tumbled more than 440 points. The two-day plunge totals about 10 percent for the major indexes.
Adding to investors' list of worries, the Labor Department said the number of people continuing to draw unemployment benefits jumped to a 25-year high, increasing by 122,000 to 3.84 million in late October.
While new claims for unemployment benefits dipped by 4,000 to a seasonally adjusted level of 481,000 last week, the levels remain elevated.
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The findings added to the market's unease ahead of today's October employment report. A survey of economists by Bloomberg News projects that the economy probably lost another 200,000 jobs last month and the unemployment rate climbed to a five-year high of 6.3 percent.
“Everybody kind of simultaneously — the consumers and businesses — is tightening belts so that's triggering a reasonably precipitous slowdown that's widespread,” said Ed Hyland, at J.P. Morgan's Private Bank. “This is something that we haven't really seen, this level of this rapid and significant pullback both in the market and the economy.”
Thursday's rout follows a drop of more than 5 percent in the market Wednesday, when the Dow plunged nearly 500 points. Investors fretted that weak readings on employment and downcast profit forecasts and job cuts from financial companies to steelmakers signaled broad economic troubles.
Reports from retailers Thursday underscore how the financial turmoil has touched all stores, discount or luxury.
The declines follow a weak September and foretell a holiday shopping season that many are characterizing as grim. Consumer spending over all fell 3.1 percent in the third quarter, its first decline in 17 years.
Among retailers, the luxury department store chain Neiman Marcus reported the deepest drop in sales at stores open at least a year, also known as same-store sales.
October sales in Neiman's specialty retail segment, which includes Neiman Marcus Stores and Bergdorf Goodman, were down 27.6 percent, in contrast to an increase of 7.8 percent a year ago.
Burton Tannsky, Neiman's chairman and chief executive, said he expected that demand would “remain weak for an extended period of time” as affluent consumers cope with stock market volatility.
Other significant falloffs: Abercrombie & Fitch (down 20 percent), the Gap (down 16 percent) and Nordstrom (down 15.7 percent).
Several others, including Chico's, J.C. Penney, American Eagle, Zumiez, Bon-Ton, Stein Mart and Pacific Sunwear, also suffered double-digit declines.
Even some discount retail chains — including Costco, Big Lots and Target – reported declines. Discounters had been the one group that had been managing to tread water amid the economic slowdown.
October same-store sales at Wal-Mart, the nation's largest retailer, increased by 2.4 percent. Bloomberg News and the Associated Press contributed.