* Allstate falls after posting quarterly loss
* Continuing jobless claims rise to record level
* Worries rise that stimulus package could be held up
* Dow off 1.5 pct, S&P off 2 pct, Nasdaq off 1.9 pct
* For up-to-the-minute market news, click []
(Updates to midmorning)
By Leah Schnurr
NEW YORK, Jan 29 (Reuters) - U.S. stocks fell on Thursday
on more dismal earnings from companies including Allstate, and
a bleak batch of economic data showed an economy still in the
grips of a recession.
Allstate Corp <ALL.N> shed nearly 20 percent to $23.80
after the largest publicly traded U.S. home and auto insurer
posted a hefty loss on soured investments. For details see
[]. Allstate helped drag the S&P financial index
<.GSPF> down more than 5 percent.
Shares of widely held Dow component Exxon Mobil <XOM.N>
were down 1.8 percent at $77.79 after Goldman Sachs removed the
company from its Americas Buy list, saying it saw better
investment opportunities among energy companies at this time.
Data showed U.S. jobless rolls hit a record peak, while new
orders for durable goods dropped in December for the fifth
straight month and sales of newly built U.S. single-family
homes slumped to their lowest since records started in 1968,
highlighting the deepening slowdown. [].
"The numbers are very weak across the board," said Michael
Darda, chief economist at MKM Partners LLC in Greenwich,
Connecticut.
"All the data through December is reflecting the credit
shock that occurred through the fall, and it is indicative of
an economy that is contracting at a very rapid pace."
The Dow Jones industrial average <> was down 121.15
points, or 1.45 percent, at 8,254.30. The Standard & Poor's 500
Index <.SPX> fell 17.10 points, or 1.96 percent, to 856.99. The
Nasdaq Composite Index <> lost 29.84 points, or 1.91
percent, to 1,528.50.
Job losses have been at the forefront this week as more
companies make massive cuts in an effort to stay afloat.
Sales of new homes saw the largest monthly decline since
1994. Analysts believe a stabilization in home sales and prices
is necessary before the economy can begin to recover.
Worries that President Barack Obama's $825 billion economic
stimulus package could still face a bumpy road also weighed
after the U.S. House of Representatives passed it late on
Wednesday although every Republican who voted opposed it.
The Senate begins debate next week. [].
Ford Motor Co <F.N> was down 2.2 percent at $1.99 after
reporting a deeper-than-expected loss, but the ailing automaker
said it would have enough cash to go ahead without government
loans. [].
Qualcomm Inc <QCOM.O> was among the biggest drags on the
Nasdaq after it cut its full-year revenue target on weak demand
for cell phone chips. Its shares gave up 6.6 percent at $34.40.
[].
The declines put an end to a four-day rally for the broad
S&P 500 that was its longest run-up in two months. So far this
year, the index is down close to 5 percent, but it is still up
about 14 percent from 11-year lows seen in late November.
(Additional reporting by Ryan Vlastelica; Editing by James
Dalgleish)
