The volatile month of July ended on Thursday with an ugly 200-point dive on the Dow as stocks were slammed by a pair of economic reports, including one that showed jobless claims rose to the highest level since April 2003. 

Today’s Market

The Dow Jones Industrial Average slid 205.67 points, or 1.78% to 11378.02, the Standard & Poor’s 500 index fell 16.88 points, or 1.31%, to 1267.38 and the Nasdaq Composite Index lost 4.17 points, or 0.18%, to 2325.55. The consumer-friendly FOX 50 fell 13.00 points, or 1.43% to 893.21.

The action highlights the back-and-forth nature of trading that has taken ahold of Wall Street, including five triple-digit moves on the Dow in either direction over the past six trading days. Wall Street continues to debate whether or not the worst of the bad news on the economy and the financial sector is over -- or whether another shoe will drop, sending the market into another tailspin. 

“We’re in a real bad spot going into August here. The valuation says to buy but from a sentimental standpoint, [investors] can’t buy. Nobody’s sold on the market being totally done” with its downturn, said Frank Davis, director of sales and trading at Lek Securities. "There's no real conviction in the market." 

After trading with modest losses through much of the session the blue chips turned sharply negative, closing near the worst levels of the day. ExxonMobil (XOM) and entertainment giant Disney (DIS) led the way down on the Dow, sliding more than 4% each after the companies reported quarterly results. On the upside, financial conglomerate Citigroup (C) posted the largest percentage gains, rising about 1%. 

Even the Nasdaq Composite sank into negative territory Thursday afternoon, erasing earlier gains that had been fueled by Bristol-Myers Squibb’s (BMY) $4.5 billion offer to acquire the rest of biotech company ImClone Systems (IMCL). Amylin Pharmaceutical (AMLN) jumped 14% to lead the advancers on the Nasdaq 100. On the other hand, Internet company Akamai Technologies (AKAM) posted the index's worst losses, diving 25% on its second-quarter sales and third-quarter guidance. 

The day took a bearish tone after the government released a pair of worse-than-expected economic reports, reminding Wall Street that the nation's economy still faces an uncertain near-term outlook. 

Most troubling of the reports was the Labor Department's, which said initial jobless claims rose by 44,000 to 448,000 last week -- the highest level since April 2003. Economists had been expecting a drop of 10,000 in initial claims. Continuing claims, which are filed by people who have remained on unemployment benefits for more than four weeks, rose to a new four-year high of 3.3 million people. 

Also, the Commerce Department reported GDP doubled to 1.9% during the second quarter but turned negative in the final period of 2007, marking the first negative reading during this economic downturn. Economists had been expecting GDP would have risen by a larger 2.3% during the second quarter thanks to a $168 billion economic stimulus package. 

Traders appeared to be spooked when former Federal Reserve Chairman Alan Greenspan told CNBC Thursday afternoon that despite the growth in second-quarter GDP the economy is "right on the brink" of a recession and will likely enter one eventually. 

Wall Street is also buzzing about another onslaught of corporate earnings, headlined by Exxon Mobil’s (XOM) record second-quarter profit of $11.7 billion that managed to fall below analysts' expectations. 

In addition to ExxonMobil, Starbucks (SBUX), cereal maker Kellogg (K) and CBS (CBS) also missed Wall Street's average earnings estimates. 

On the other hand, credit card giants Visa (V) and MasterCard (MA), cell phone manufacturer Motorola (MOT), Aetna (AET), Disney (DIS) and insurer Prudential (PRU) all reported better-than-expected quarterly results.  

Meanwhile, Wall Street is focused on the price of crude oil, which erased much of Wednesday's big gains by closing below $125 a barrel. Oil prices fell $2.69 to end the day at $124.08 a barrel, continuing its trend downward as gasoline demand has weakened. 

The economic and earnings headlines overshadowed M&A action from Bristol-Myers Squibb, which offered $60 a share to buy the remaining shares of ImClone Systems. The bid represents a 29% premium from ImClone's Wednesday closing price. Bristol-Myers currently owns about 16.6% of ImClone.

Corporate Movers

Ford (F), General Motors (GM) and Chrysler LLC had their credit ratings cut by Standard & Poor's, which cited mounting cash losses and deteriorating conditions in the U.S. auto maker. The agency also cut ratings on the automakers' financing arms. S&P said GM's liquidity could be halved by cash losses in 2008 and 2009. However, analysts said few of the Big Three's liquidity problems would be helped by a bankruptcy filing.

Bear Stearns ex-CEO Alan Schwartz will leave JPMorgan Chase (JPM) on August 31, sources at JPMorgan told FOX Business. “It is what it is. Schwartz will most likely move onto a competitor or into a private equity firm," a source inside JPMorgan said, adding that the decision was "amicable." Bear Stearns was sold to JPMorgan in March after the firm collapsed during the darkest days of the credit crisis. 

Exxon Mobil’s (XOM) second-quarter results were nothing less than historic, but they still missed Wall Street's expectations, sending the stock sharply lower. The company reported a profit of $2.27 a share on $138 billion in revenue. It was the largest quarterly profit by a publicly-traded corporation ever, beating Exxon's own record of $11.7 billion in the fourth quarter of 2007. Analysts, however, expected Exxon to post earnings of $2.52 a share.

General Motors (GM) is in talks with Indian automaker Mahindra & Mahindra to sell its Hummer brand, according to Reuters. GM has sought to sell the business as U.S. truck and SUV sales plunge and the automaker tries to raise $4 billion by selling assets. The automaker is also in talks with a Russian and a Chinese automaker over selling Hummer, Reuters reported. Additionally, GM has reportedly hired consultants and investment bankers to gauge the Chinese market for potential buyers of any other GM assets. 

Motorola (MOT) saw its stock jump 12% after the cell phone maker posted an unexpected profit of $4 million, or less than 1 cent per share. Analysts had been expecting a loss of 3 cents per share. Sales slid 7.4% to $8.1 billion, topping estimates of $7.7 billion. 

MasterCard (MA) tumbled 10% even after the credit card giant's second-quarter results missed estimates. The company aid it lost $747 million, or $5.74 per share, due to a charge related to a settlement with rival American Express (AXP). However, excluding one-time items, it earned $276 million, or $2.11 a share. Analysts had been looking for an adjusted-profit of $2.02 a share. While Mastercard reaffirmed its double-digit percentage revenue growth for 2008, the company did say it will be less than the 22% growth it enjoyed in 2007. 

Marathon Oil (MRO) traded higher after the sixth-largest U.S. oil refiner said it may split itself into two companies, one for oil and gas production and the other for refining and marketing. Analysts and shareholders approved of the announcement, which overshadowed Marathon's weaker-than-expected quarterly results. The company said a decision could be made in the fourth quarter and would likely take effect during the first quarter of 2008. Marathon's adjusted- profit of $1.20 per share missed average estimates of $1.50. 

CBS (CBS) fell more than 3% to 52-week lows after the media giant posted weaker-than-expected results and lowered its outlook. The company's adjusted-profit of 49 cents missed average analyst estimates by 51 cents, according to Thomson Reuters data. Looking ahead, CBS sees 2008 operating income growth to be flat. 

AK Steel (AKS) rose sharply on a Financial Times dealReporter story saying that the company has held preliminary talks with several parties about a potential sale in an all-cash deal. 

Data Dump 

The Chicago Purchasing Manager's Index rose to 50.8 during July. Economists had been expecting a reading of 49.0. 

World Markets

The Dow Jones Euro Stoxx 50 Index, a gauge of the 50 biggest companies in Europe, rose 0.49 points, or 0.01%, to 3367.82. The FTSE 100, London's benchmark index, fell 8.80 points, or 0.16%, to 5411.90.

On the continent, Paris' CAC 40 lost 8.19 points, or 0.19%, to 4392.36, while Germany's DAX picked up 19.44 points, or 0.30%, to 6479.56.

In Asia, Hong Kong's Hang Seng gained 40.50 points, or 0.18%, to 22731.10 while Japan's Nikkei 225 rose 9.02 points to 13376.81.