June 24th, 2010
10:51 PM ET

Dim economic outlook hits stocks, dollar

A look at highlights from the day's business news:

Stocks slump on economic woes 

Stocks slumped Thursday, with the Dow losing 145 points, as investors mulled mixed reports on the economy and a sell-off in bank shares as Wall Street reform talk move toward a close. 

Dow Jones industrial average lost around 145 points, or 1.4 percent. The S&P 500 lost 18 points or 1.7 percent and the Nasdaq composite lost 37 points or 1.6 percent.

Stocks fell after reports showed a still-tough environment for the manufacturing and labor markets and one day after the Federal Reserve sounded a cautious tone on the economy.

The Fed issued a cautious growth outlook Wednesday on the back of the
day's weak May new home sales report. That left stocks mixed to lower, but the tone turned even more negative overnight, with markets in Europe falling and U.S. stocks opening weaker.

Dollar mixed on cloudy economic outlook
 
The dollar was mixed against other currencies Thursday amid concerns about the outlook for the U.S. economy. 

The dollar was down 0.1 percent versus the euro to $1.2327. But it gained 0.2 percent versus the U.K. pound to $1.4928. Against the Japanese yen, the dollar was down 0.3% to  ¥89.52. 

The dollar came under pressure in the previous session after the Federal Reserve issued an assessment of the economy that disappointed some investors.

As expected, the central bank held interest rates steady near zero
percent. But Fed policymakers said in a statement that economic growth is likely to stay moderate for a while, although activity has improved. In addition, they were concerned about the weakness in the housing market and the "less supportive" financial conditions as a result of the European debt crisis. 

Oil pares losses 
 
Oil prices pared early losses and posted modest gains Thursday as investors weighed weak housing reports with better-than-expected reports on initial jobless claims and manufacturing.

Crude oil futures for August delivery added 16 cents, or 0.2 percent, to settle at $76.51 a barrel. Earlier, prices fell 1.4 percent to 75.32. The national average price for a gallon of regular unleaded gas increased
to $2.753, up 1.2 cents from the previous day's $2.741, according AAA.

Worse-than-expected economic news has dragged down oil prices by almost 2 percent lower during the past two sessions. A report earlier this week showed that existing home sales fell 2 percent last month, while a separate report showed that new homes sales fell almost 33 percent to a record low in May, the first month following the expiration of the homebuyer tax credit. 

CNNMoney.com reporters Ben Rooney, Alexandra Twin and Hibah Yousuf contributed to this report.

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