Stocks sink; banks rise on BofA deal - USA Today

The rest of the market turned lower. Oil fell and Treasuries rose after the government said more people hit the unemployment line last week.

Apple Inc., the world's largest technology company, fell 1% after CEO Steve Jobs resigned late Wednesday. Jobs' departure was expected because of his health problems. Richard Gardner at Citigroup recommended investors buy the stock.

BofA jumped 11%. The troubled bank had lost half its value this year as investors grew worried about its need to raise capital and its liabilities related to subprime mortgages.

Other banks also rose after the billionaire investor lent his credibility to Bank of America. Morgan Stanley and Citigroup Inc. rose 3%. Financial stocks were the only one of the 10 industry groups in the Standard & Poor's 500 index to rise.

All three major indexes fell in afternoon trading after opening higher: The Dow Jones industrial average, the Standard & Poor's 500 index, and the Nasdaq composite index. The Dow Jones industrial average fell in afternoon trading. It had been up 85 points shortly after the opening bell. The Dow rose 503 points in the first three days of this week.

The S&P 500 index, the benchmark for most money managers, has gained 3.5% this week but is still down 10% this month.

Indexes turned lower shortly after Germany's stock market took a sudden dive. Germany's main index, the DAX, lost 4% within 20 minutes. European markets had been trading higher but then followed Germany's DAX down. The DAX trimmed its losses and closed down 1.7%.

This week's trading has been marked by a series of sudden reversals. Robert Stein, a money manager responsible for $1.2 billion at Astor Asset Management, said questions surrounding the direction of the economy have made investors uncertain and the stock market more volatile. Gains made one day can quickly disappear the next.

"We're not seeing anything that's convincingly bearish enough to call another recession, but nothing optimistic enough to suggest that a recovery is going to regenerate," he said.

Earlier Thursday, the government reported an increase in the number of first-time claims for unemployment benefits last week. The Labor Department said applications for benefits rose to 417,000, the highest in five weeks. The figure was inflated a strike at Verizon, which ended earlier this week.