By Leah Schnurr
NEW YORK (Reuters) - Stocks fell in choppy trading on Thursday, putting the Dow within striking distance of fresh bear-market lows as investors fretted over the deteriorating economy and the fate of ailing financials.
Reports showing a record high in the number of workers continuing to claim jobless benefits in the first week of February and sharp contraction in factory activity in the Mid-Atlantic region depicted an economy in deep recession.
Bank of America
"I think that conviction is in the process of breaking," said Chip Hanlon, president of Delta Global Advisors, Inc in Huntington Beach, CA.
"If that's the case, then I think you could look for a whoosh to the downside."
Losses were cushioned by energy shares that gained along with the price of oil, which jumped nearly 10 percent after government data showed a surprise fall in crude inventories last week. Chevron
The Dow Jones industrial average <.DJI> was off 39.34 points, or 0.52 percent, to 7,516.29. The Standard & Poor's 500 Index <.SPX> lost 2.41 points, or 0.31 percent, to 786.01. The Nasdaq Composite Index <.IXIC> was down 9.37 points, or 0.64 percent, at 1,458.60.
Since the start of the year, the Dow has fallen more than 14 percent, while the S&P 500 has lost more than 12 percent. The losses put the Dow on track to break the bear market closing lows hit on November 20.
Bargain-hunting helped put a floor under the market and earlier pushed the S&P 500 and Nasdaq up more than 1 percent.
A disappointing outlook from Hewlett-Packard Co
(Editing by James Dalgleish)
