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Investors were hit with a triple whammy of bad economic news Thursday: manufacturing still stinks, more people are jobless and confidence in the future is less than hoped.

As a result, stocks finished sharply lower: the Dow Jones industrial average (INDU) tumbled 144 points, or 1.4%, to 10,271 and the S&P 500 (SPX) slipped 19 points, or 1.7% to 1,076. The tech-heavy Nasdaq (COMP) composite fell 37 points, or 1.7%, 2,179.

Stocks were coming off two days of gains, driven by solid earnings outlooks from retail giants Wal-Mart, Home Depot and Target. But even during this week’s earlier rallies, traders were saying they were remaining cautious given fears about a double-dip recession — or at least, a slower recovery.

Thursday’s disappointing numbers on weekly jobless claims, manufacturing in the Philadelphia region and leading indicators just fanned the flames on those gloom-and-doom fears.

"Today’s news on the U.S. economy has been nothing but awful," Paul Ashworth, senior economist with Capital Economics said in a note to investors.

A report that showed manufacturing activity in the Philadelphia region slowed to a 13-month low "suggests the industrial recovery is teetering on the brink," he said.

Economy: A report from the government showed the number of Americans filing for unemployment insurance unexpectedly jumped 12,000 to 500,000 last week from an upwardly revised 488,000 the previous week. The figure was the highest level since the week ended Nov. 14.

Economists surveyed by Briefing.com were expecting claims to drop to 475,000.

The Philadelphia Federal Reserve’s economic index took an unexpected dive in August, turning to negative 7.7 when analysts had expected a positive 7.5. The index measures manufacturing activity in eastern Pennsylvania, southern New Jersey and Delaware, and any number below zero indicates business activity in the sector is slowing down.

Meanwhile, the index of leading economic indicators - a measure of the economy’s future performance - increased a mere 0 guaranteed payday loans.1% in July, the Conference Board said. Analysts had forecast a 0.2% increase for the month.

Companies: After the close, Dell reported higher quarterly earnings and revenue that surpassed analysts’ forecasts. But shares of Dell (DELL, Fortune 500) fell about 1% in after-hours trading after losing 1.2% during regular hours.

Also after the bell, Hewlett-Packard reported quarterly earnings and sales that strongly topped its year-ago results. HP’s (HPQ, Fortune 500) stock dipped 0.3% in after-hours trading, after it fell 1.5% during the day.

Earlier Thursday, Intel (INTC, Fortune 500) said it will acquire security software maker McAfee (MFE) for $7.68 billion. Shares of Intel slipped 3.3%, while McAfee’s stock spiked about 57%.

World markets: European stocks closed lower. The FTSE 100 in Britain slipped 1.7% and the DAX in Germany moved down 1.8%. The CAC 40 in France fell 2%.

Asian shares finished the session in positive territory. The Nikkei in Japan climbed 1.3%. The Shanghai Composite rose 0.8% and the Hang Seng in Hong Kong added 0.2%.

Currencies and commodities: The dollar rose against the euro but fell against the U.K. pound and the Japanese yen.

Oil futures for September delivery slipped 99 cents to settle at $74.43 a barrel. Gold for December delivery rose $4 to settle at $1,235.40.

Bonds: Prices for Treasurys were higher. The yield on the 10-year note fell to 2.58% from 2.63% late Wednesday. Bond prices and yields move in opposite directions.

Market breadth: Market breadth was negative. On the New York Stock Exchange, losers outnumbered winners five to one on volume of 810 million shares. On the Nasdaq, decliners beat advancers five to one on volume of 1.8 billion shares. 

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The battle between Carl Icahn and Mentor Graphics Corp. intensified Friday, as the activist investor increased his stake in the firm by 14 percent.

The acquisition puts Icahn on the verge of triggering a poison pill adopted by the company last month to prevent a takeover.

Icahn has spent nearly $95.4 million to gain a 14.13 percent of the Wilsonville-based firm (NASDAQ: MENT), according a filing Friday with the U.S. Securities and Exchange Commission.

Mentor, a maker of tools used in designing microchips, in June adopted a poison pill provision — designed to make a target less attractive and more expensive to a potential acquirer — largely in response to Icahn’s continued purchase of shares.

Under the plan, once someone acquires a 15 percent stake, Mentor will distribute additional shares at a 50 percent discount to shareholders of record as of July 6.

Whomever triggers the poison pill, in this case Icahn, however, is not eligible to buy the discounted shares.

The provision would also be triggered if an existing stockholder with a 15 percent share acquires more without board approval.

Icahn first disclosed a 6.9 percent stake in May, saying he planned to seek a meeting with management to discuss how to maximize shareholder value.

In June, Icahn disclosed in a regulatory filing that he met with the Wilsonville-based company, but neither Icahn nor Mentor have commented on the meeting.

Mentor shares closed Friday up 7 cents, or less than 1 percent, to $9.62. Shares have traded between $6.59 and $9.95 in the past 52 weeks.

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The city of Phoenix has received $423 million to date through the American Recovery and Reinvestment Act, Mayor Phil Gordon said Friday.

On Wednesday, the U.S. Department of Homeland Security awarded Phoenix Sky Harbor International Airport $26.6 million for two baggage screening systems.

“The city of Phoenix continues to work hard to stimulate our economy and put our residents back to work,” Gordon said in a prepared statement. “Surpassing $400 million in ARRA funds is a significant accomplishment and demonstrates our commitment to secure funds for critical projects and create jobs.”

Gordon noted other ARRA-funded projects, including $25 million for energy-efficiency improvements to neighborhoods along the Metro light rail system. He wants to call that the “Green Rail Corridor.”

Phoenix has also received stimulus funds for house weatherization grants for low-income homeowners, and for transportation projects.

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The landlord at Eastland Mall has told its tenants they must vacate the shopping center by June 30.

The landlord, LNR Partners Inc. of Miami, says the mall’s owners have been unable to find a buyer for the property, and the property is now in foreclosure, according to a letter delivered to store owners Friday.

“It is understood that the lender or any other party that acquires title to Eastland Mall at foreclosure will close the mall,” the letter states. “We regret that this action is necessary, but given the present economic environment, we have no other option.”

The mall, which has operated at Central Avenue and Sharon Amity Road since 1975, has struggled in recent years to attract and maintain tenants. It is the Charlotte region’s fifth-largest shopping center, measuring nearly 1.1 million square feet.

“We will continue to serve the tenants and the customers until June 30,” says Christine Vigneault, general manager of Eastland Mall.

Last year, the city of Charlotte had options to purchase the former Belk Inc. and Dillard’s Inc. anchor spaces as part of a plan to redevelop the property. But, after a rezoning hearing, the City Council directed the city staff to “take no further action” on the mall.

Discussions about buying the struggling property pegged acquisition costs for the mall, its anchors stores and surrounding parcels at up to $50 million, according to sources familiar with those talks.

In October, the real estate investment trust that owned the core of the retail center — but not its four anchor-store spaces — handed the property back to its lender. Ohio-based Glimcher Realty Trust (NYSE:GRT) had a $42 million loan on the property.

The real estate investment trust’s mortgage was diced up and sold off as commercial mortgage-backed securities long ago.

The mall is now under the control of a holding company overseen by LNR.

LNR, the special servicer on the loan, is owned by private-equity fund Cerberus Capital Management.

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Falls Church security contractor DynCorp International Inc. has agreed to be acquired by private investment firm Cerberus Capital Management LP for $1.5 billion.

Terms of the proposed transaction call for Cerberus to pay $17.55 in cash for each share of DynCorp International common stock, approximately $988 million in cash based on the approximately 56.29 million shares of stock outstanding. Assumption of debt would make up the balance of the purchase price.

The cash price of $17.55 for DynCorp shares (NYSE: DCP) is a 49 premium to its closing price Friday of $11.75 per share. DynCorp went public in May 2006 at $15 a share. The stock reached its peak in Jan. 2008 when it traded at $27.58.

As a security contractor, DynCorp has been active player in U.S. security missions around the globe, especially Iraq. In its latest profit report, DynCorp earned $20.3 million, or 36 cents per share, on revenue of $915 billion.

The acquisition by Cerberus has been approved by DynCorp’s board of directors and recommended to shareholders, but is contingent on approved by a DynCorp shareholder vote.

DynCorp has the opportunity to get more from a sale. The acquisition agreement gives DynCorp 28 days to solicit alternative proposals from third parties and the company said Monday it intended to consider any such proposals. But at least one big block of owners think the Cerberus offer is good enough to take. Affiliates of Veritas Capital FundManagement LLC, which hold nearly 35 percent of DynCorp International shares, have agreed to vote in favor of the transaction.

Assuming the deal is approved by shareholders and government regulators, both firms expect the transaction to close in the third or fourth quarter of 2010. After that, DynCorp would become a private company wholly-owned by Cerberus.

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Employment dropped in nearly all of the 334 largest U.S. counties from September 2008 to September 2009, and Kansas City-area counties didn’t escape the declines.

Clay County took the greatest local hit, with employment falling 5.7 percent, or 86,600 jobs, according to figures the U.S. Bureau of Labor Statistics released Thursday. Johnson County trailed close behind, with employment diving 5.6 percent, or 299,400 jobs. Jackson County experienced a decline of 4.4 percent, or 353,100 jobs. Wyandotte County saw a drop of 2.7 percent, or 78,800 jobs, which was the 35th-best showing in the nation.

See the complete report here.

None of the drops were as severe as in Elkhart County, Ind., where employment fell 14.5 percent during the period, mostly because of manufacturing job losses.

The greatest gain came in Yakima County, Wash., where employment rose 1.7 percent.

The nation’s average weekly wage slid 0.1 percent during the third quarter of 2009, the first year-to-year drop in three quarters and one of only five drops since 1978. Average financial activities wages fell 2.3 percent; average manufacturing wages fell 0.2 percent. Wage changes ranged from a 6.6 percent gain in Bell County, Texas, to a 13.2 percent loss in Rutherford, Tenn.

Here’s how the Kansas City-area counties stacked up in terms of average weekly wage and the percent change year to year:

• Clay County, $785, up 2.7 percent

• Jackson County, $858, up 0.7 percent

• Johnson County, $858, down 0.9 percent

• Wyandotte County, $812, down 2.2 percent

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SanTan Village, the outdoor open-air shopping mall in Gilbert, is hosting an Italian street painting festival April 10-11.

Called ‘Bella Strada,” the event features more than 150 artists that will chalk the "streets" of the center with their artistic visions. In addition, there will be live music, performances and other amenities to create a festival-like atmosphere. Children also will have an opportunity to draw their own masterpieces on the pavement.

From 6 p.m. to 9 p.m. on Saturday, restaurants across the San Tan center will put on Restaurante di SanTan, an event that features a range of samplings online pay day loans. Tickets to that portion of the event cost $10 per person or $8 each for a family of four. Access to the arts and music is free.

Proceeds will benefit Save the Family, a Mesa-based nonprofit that provides housing and other services to families with children.

For more, visit www.santanvillage.com or www.savethefamily.org.

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BRUSSELS — The sinking euro and a downgrade of Portugal’s debt put renewed pressure on European leaders Wednesday to come up with a bailout plan for Greece and stem the government debt crisis undermining their shared currency.

But agreement remained elusive as today’s summit meeting approached. Markets increasingly expect any bailout for Greece to involve the International Monetary Fund — and EU governments are discussing whether they would permit that and add financial help from eurozone nations.

Germany is holding back a deal, reluctant to put taxpayer money on the line for Greece. But failure to help an indebted eurozone country would be an admission that Europe can’t halt the crisis in its currency union.

The latest vote of no confidence in vulnerable eurozone economies came with Fitch Ratings’ downgrade Wednesday of Portugal’s debt faxless cash advance. The credit ratings agency said that Portugal’s prospects for recovery were weaker than others in the eurozone and that it faced problems shrinking its deficit.

The euro hit a 10-month low against the U.S. dollar on Wednesday on the Portuguese downgrades and the uncertainty over Europe’s dithering over Greece — which says it will need eurozone or IMF help if markets keep charging it painfully high costs to borrow.

Greece’s debt crisis has undermined the euro by showing that the rules supporting it have not prevented governments from overspending, hitting public accounts. Athens’ woes are also putting pressure on other eurozone countries with troubled finances, such as Portugal and Spain.

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The head of the Securities and Exchange Commission confirmed Wednesday that the agency was investigating several companies’ actions in the run-up to the financial crisis of 2008.

SEC Chairman Mary Schapiro said "it would be safe to assume" that the agency was looking very closely at the conduct of a number of firms during this time. She did not name the companies.

Schapiro spoke in testimony to a House Appropriations subcommittee weighing the agency’s request for about $1.3 billion for the budget year starting Oct. 1, a 12 percent increase from the current year.

Lawmakers want to know if the sort of accounting gimmick recently uncovered that was used by the collapsed investment firm Lehman Brothers to mask billions in debt was widely deployed on Wall Street.

The SEC’s review of the Lehman Brothers disaster "has taken us down a path where we’re looking broadly," Schapiro said after her testimony.

The implosion of Lehman Brothers Holdings Inc. into the biggest bankruptcy in U.S. history in September 2008 precipitated the financial meltdown that plunged the economy into the most severe recession since the 1930s.

After saddling itself with tens of billions in troubled assets that couldn’t easily be sold, Lehman masked $50 billion in debt and its perilous financial condition by using the so-called Repo 105 accounting gimmick, an examiner appointed by the bankruptcy court found in an extensive report issued last week personal loans for people with bad credit.

Questions are being raised about the supervision of Lehman by the SEC and the Federal Reserve in the months before its collapse.

"The culture of the agency is changing. It doesn’t happen overnight," Schapiro told the lawmakers. "We’re working very hard at the SEC … to rebuild the agency’s credibility."

In the meltdown’s wake, the SEC and the Justice Department launched wide-ranging investigations of companies across the financial services industry, believed to include American International Group Inc. and mortgage giants Fannie Mae and Freddie Mac as well as Lehman. A year and a half after the financial crisis struck, charges haven’t yet come in most of the investigations.

The autopsy of Lehman issued last week by bankruptcy examiner Anton Valukas could serve as a valuable road map for the two agencies in their investigations, experts say.

Schapiro said Wednesday that the report raised "some very interesting points" and would be "helpful."

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New Zealand’s economy lost some momentum as retail spending and the property market slowed in the first months of 2010, according to the Treasury Department.

Leading indicators suggest January retail sales may decline and the housing market has slipped, the department said in a report posted on its Web site. The monthly update doesn’t contained new forecasts.

Reserve Bank Governor Alan Bollard last month said he is looking for evidence that the economic recovery has become self sustaining before he will start to raise interest rates from record lows. The Treasury said forward-looking indicators such as immigration and business confidence remain upbeat, matching the view of economists who expect Bollard will raise the official cash rate in June.

“The potential for a strong acceleration in gross domestic product is suggesting the Reserve Bank should keep to its stated tightening track” of a rate increase around the middle of 2010, said Craig Ebert, senior economist at Bank of New Zealand Ltd. in Wellington.

Nine of 12 economists surveyed by Bloomberg News expect Bollard will raise the official cash rate from 2.5 percent in June. Two forecast an April increase and one tips July. None expect any change in policy at the next review on March 11.

Indicators of retail spending suggest sales volumes declined in January, the Treasury said. Consumer confidence fell in February, according to an index compiled by ANZ National Bank Ltd. and Roy Morgan Research.

House Sales

The number of house sales plunged 16 percent in January, the department said, citing its analysis of Real Estate Institute figures. The market is likely to remain steady in face of rising home-loan interest rates, it said payday loans.

Extra new listings of properties for sale could depress prices, said Ebert. Listings rose 24 percent in February from a year earlier, Web site realestate.co.nz said today.

Business confidence rose to a 10-year high last month, according to a second ANZ Bank survey published on Feb. 25. The economy could expand 4 percent this year, based on the survey’s responses, the Wellington-based bank said.

“The results were consistent with the economy continuing to expand over 2010,” the Treasury said today.

Buoying the economy, immigration is rising and New Zealand’s currency has fallen 3.8 percent against the U.S. dollar in the past three months. Exports including milk powder, cheese and meat make up 30 percent of the economy.

Commodity Prices

“The lower exchange rate in recent months is providing more confidence for exporters,” the Treasury said.

Commodity export prices have surged 7.9 percent in New Zealand dollars from January, according to an ANZ Bank index published today. Prices for six of nine commodities monitored by the bank rose in February.

Annual immigration growth was the strongest in more than five years, according to a government report today.

The number of permanent migrant arrivals exceeded departures by 22,588 in the 12 months ended Jan. 31, up from 21,253 in the 12 months through December. That’s the highest since May 2004.

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