Bonds News

US STOCKS-Wall St falls to session lows, Nasdaq off 4 pct

(Updates with Nasdaq down 4 percent)

NEW YORK, Oct 2 (Reuters) - U.S. stocks extended losses on Thursday as tight credit markets and a spate of bleak economic data left investors even more anxious about the economy’s health a day before release of the crucial payrolls report.

The Nasdaq shed 4 percent as investors also fretted about the fate of a $700 billion financial rescue package that was passed by the Senate on Wednesday, but still must win approval from the House.

The House voted down an earlier version of the bill on Monday, leading to the worst stock sell-off since just after the 1987 market crash.

Earlier, data showing a rise in the number of Americans filing claims for first-time jobless benefits and a sharp drop in factory orders added to the negative tone.

The Dow Jones industrial average .DJI was down 328.15 points, or 3.03 percent, at 10,502.92. The Standard & Poor's 500 Index .SPX was down 42.92 points, or 3.70 percent, at 1,118.14. The Nasdaq Composite Index .IXIC was down 84.73 points, or 4.09 percent, at 1,984.67. (Reporting by Steven C. Johnson; Editing by Jan Paschal)