Jan. 31 (Bloomberg) -- U.S. stocks fell, capping the worst January ever, after a jump in jobless claims spurred concern that the economy is slipping into a recession and pushed down shares of energy and technology companies.

Exxon Mobil Corp. and Chevron Corp., the largest U.S. oil producers, tumbled after crude fell for the first time in six days. Adobe Systems Inc., the biggest maker of graphic-design software, slumped after Jefferies & Co. advised selling the shares on concern that consumer spending is slowing. Shares declined after major European benchmarks dropped more than 1 percent and profit forecasts trailed analyst estimates at Starbucks Corp. and Amazon.com Inc.

The S&P 500 retreated 10.11, or 0.8 percent, to 1,345.7 at 10:36 a.m. in New York and is down 8.3 percent this month, the worst January in its 80-year history. The Dow Jones Industrial Average decreased 83.24, or 0.7 percent, to 12,359.59. The Nasdaq Composite Index slipped 13.74, or 0.6 percent, to 2,335.26. Almost three stocks fell for every two that rose on the New York Stock Exchange.

``The one thing that's propping up the economy is decent labor markets,'' said Greg Woodard, who helps oversee about $18 billion as portfolio strategist at Manning & Napier in Fairport, New York. ``If you see that turn down, then people are certainly going to increase their probabilities of a sustained downturn.''

Eight of 10 industry groups in the S&P 500 declined after the Labor Department said the number of Americans filing first- time claims for unemployment benefits rose more than forecast to 375,000 last week, a 27-month high. U.S. stocks yesterday retreated after concern bond insurers will lose their top credit ratings erased a rally spurred by the Federal Reserve's second interest-rate cut in nine days.

Energy Slump

Energy shares declined after prices for crude oil, gasoline and heating oil fell. Exxon Mobil Corp., the biggest U.S. energy company, dropped $1.38 to $83.90. Chevron Corp., the second- largest fuel producer, lost $1.16 to $82.07.

Marathon Oil Corp., the largest refiner in the U.S. Midwest, dropped after reporting profit excluding some items that trailed analysts' estimates on narrower refining margins for gasoline and diesel. Tesoro Corp., the largest refiner in the western U.S., fell $2.03 to $38.37 after posting a fourth- quarter loss.

Peabody Energy Corp., the largest U.S. coal producer, retreated $4.35 to $51.03 after fourth-quarter profit dropped 80 percent. Cameron International Corp., the second-largest U.S. maker of oilfield equipment by market value, declined $4.41 to $38.65 after forecasting lower 2008 earnings than analysts estimated. Energy shares in the S&P 500 declined 2.2 percent as a group for the biggest loss among 10 industries.

Adobe slumped $2.08 to $33.86.

Mortgage Concern

Citigroup, the biggest U.S. bank by assets, lost $1.05 to $26.51. Merrill Lynch & Co., the largest U.S. brokerage, declined $1.71 to $54.38.

S&P cut or put on review yesterday the ratings on $534 billion of bonds and collateralized debt obligations tied to home loans made to people with poor credit. Losses from the securities may exceed $265 billion as regional U.S. banks, credit unions and overseas financial institutions write down the value of holdings, S&P said.

Amazon.com dropped $2.20 to $67.97. The world's largest Internet retailer said fourth-quarter profit margins narrowed on free shipping, discounts and sales of less profitable electronics. The company also forecast full-year operating income that trailed analysts' estimates.

Profit Declines

Starbucks Corp. decreased 90 cents to $18.32. The world's biggest chain of coffee shops said it will open fewer cafes this year and forecast annual profit below analysts' estimates.

Profit excluding some items at S&P 500 companies probably fell 18 percent in the fourth quarter, the biggest decline since 2001, according to analysts' estimates compiled by Bloomberg. For the current quarter analysts expect earnings to rise 1.2 percent.

Bristol-Myers Squibb Co. declined $1.45 to $21.81. The seller of the anti-clotting pill Plavix posted a net loss after taking charges on investments backed by subprime securities. The company wrote off $275 million in investments in the quarter, which could rise to as much as $417 million, a Bristol-Myers spokeswoman said.

Europe's Dow Jones Stoxx 600 index lost 2.1 percent, dragged down by financial shares including ING Groep NV and UBS AG. Asian stocks rose after Honda Motor Co. raised its forecast and Hyundai Heavy Industries Co. reported a record profit.

To contact the reporter on this story: Michael Patterson in New York at mpatterson10@bloomberg.net.

Last Updated: January 31, 2008 10:37 EST