Economic worries sink stocks Thursday
NEW YORK, Aug. 4 (UPI) -- Investors fled stock positions Thursday in a broad retreat, as worries of weak U.S. and European economies continued to rattle confidence.
The Dow Jones industrial average saw more than 500 points wiped out as the index dropped 4.31 percent, setting the index almost 300 points below its position at the start of the year.
The broader Standard & Poor's 500 index was also sent reeling, losing 4.78 percent, 60.27 points, to 1,200.07. The Nasdaq composite index shed 5.08 percent, giving up 136.68 points to 2,556.39.
The Labor Department said 1,000 fewer jobless claims were filed in the week ending Saturday, but investors are concerned with months of disappointing data in manufacturing, housing, unemployment and consumer spending.
Across the Atlantic, the European Central Bank moved to shore up bond markets as fears of debt burdens in Spain and Italy continued to undermine investor confidence. On Wall Street, 10-year treasury notes rose 1 25/32 to yield 2.425 percent, as investors sought safety in government bonds.
On the New York Stock Exchange, 140 stocks advanced and 2,968 declined on a volume of 7.4 billion shares traded.
The euro fell to $1.41 from Wednesday's $1.4323. Against the yen, the dollar rose to 79.10 yen from Wednesday's 77.06 yen.
In Tokyo, the Nikkei 225 index rose 0.23 percent, 22.04, to 9,659.18.
In London, the FTSE 100 index lost 3.2 percent, 178.75, to 5,405.76.
Small businesses said best for growth
UNIVERSITY PARK, Pa., Aug. 4 (UPI) -- Small local businesses, not big nationwide companies, could be the key for communities to ignite long-term economic growth, U.S. economists say.
Economists at Penn State University say small, locally owned businesses and startups usually generate higher incomes in a community, whereas big, non-local companies can actually depress a local economy.
"Local ownership matters in important ways," Stephan Goetz, professor of agricultural and regional economics, said Thursday in a Penn State release.
"Smaller, locally owned businesses, it turns out, provide higher, long-term economic growth."
Goetz defines those businesses as standalone companies with 10 to 99 employees owned by residents or businesses with headquarters in the same state.
Large corporations have internal systems for services such as accounting, legal, supply and maintenance that are often based outside the county or state they operate in, outsourcing those jobs away from local residents, he said.
"Many communities try to bring in outside firms and large factories," Goetz said, "but the lesson is that while there may be short-term employment gains with recruiting larger businesses, they don't trigger long-term economic growth like startups do.
"We can't look outside of the community for our economic salvation." Goetz said. "The best strategy is to help people start new businesses and firms locally and help them grow and be successful."
DOT fines United Airlines $20,000
WASHINGTON, Aug. 4 (UPI) -- U.S. Department of Transportation said it fined United Airlines for failing to inform passengers correctly of compensation allowed for luggage problems.
The department said it had fined the airline $20,000 for failing to inform customers of an increase in the amount allowed for delayed or lost baggage per passenger, which currently is $1,800.
The limit on compensation was raised in December 2009.
In January, the department's Aviation Enforcement Office discovered that United was still informing customers of the old rate for compensation.
The department said United was not correctly informing passengers of the new limit, but found no evidence that it was paying less than the proper amount on baggage claims.
Khodorkovsky losses appeal in Moscow
MOSCOW, Aug. 4 (UPI) -- An appeals court in Moscow said a second round of convictions against the former head of Russian oil company Yukos should stand.
The Moscow City Court ruled that a lower court decision that upheld a conviction against Mikhail Khodorkovsky was valid, RIA Novosti reported Thursday.
Khodorkovsky has maintained for years that the cases against him were politically motivated. The former executive, once among the richest men in Russia, funded opposition groups in Russia before charges against him were filed.
In the aftermath of his first trial, Yukos was dismantled and sold mostly to state-owned businesses.
Khodorkovsky's business partner Platon Lebedev has also maintained his innocence.
On Thursday, Moscow City Court Judge Yevgeniya Kolyshnitsyna said, "The decisions by the Preobrazhensky court concerning the appeals and complaints of the defendant are valid and well-grounded."
Khodorkovsky is not eligible for release until 2016. In May, his sentence was reduced by one year to 14 years by the Preobrazhensky District Court.