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Stocks sink, despite upbeat jobs data

Stocks sank Thursday as data on the labor market did little to counter concerns about weakness in the global economy after soft manufacturing data in the euro zone and China.

New claims for unemployment benefits dropped to a fresh four-year low last week, according to a government report Thursday that offered evidence the jobs market recovery was gaining traction.

Initial claims for state unemployment benefits fell 5,000 to a seasonally adjusted 348,000, the lowest level since February 2008, the Labor Department said.

The HSBC flash purchasing managers index showed China's manufacturing sector activity shrank in March for a fifth successive month, while the March Markit's Eurozone Composite PMI showed further contraction, led by a decline in French and German factory activity.

The data greatly reduced hopes the euro zone could sidestep a recession while indicating China's slowdown has yet to wane.

Reuters contributed to this report.